Table Of Contents

List of Operating Expenses

Publication Date :

11 Mar, 2019

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List of Operating Expense under SG&A Expenses

These costs are part of operating expenses because they incur due to the main business activities. These expenses include telephone expenses, transportation expenses, utility expense, sales expenses, Rent, repair & maintenance, bank charges, legal expenses, office supplies, insurance, salaries and wages of administrative staff, Research expenses, etc.

Below is the list of 13 Operating expenses that come under Selling, General, and Admin costs.

#1- Telephone Expenses

These are the costs incurred on a landline or mobile phone. Generally, monthly bills are payable to them. Many Companies also reimburse their employees for their telephone expenses. Depending upon the company policy, telephone expenses are charged to the Profit and loss account.

#2 - Travelling Expenses

These are the expenses paid by the company for their staff during their official visit. The staff can travel to meet customers, for some supplies, or any other event. In such a case, either company pays them expenses directly or reimburses them after their visit. These expenses are charged in the P&L as traveling expenses.

#3 - Office Equipment and Supplies

These are the expenses incurred to purchase office supplies for use on a day-to-day basis in the office. For example, pens, paper, clippers, etc.

#4 - Utility Expenses

The expenses related to payment of utility bills of the company, like expenses of water and electricity generally used for the daily operating activities are utility expenses. They are charged to the profit and loss account of the company.

#5 - Property Tax

The property tax paid by the company on its properties forms part of the operating expenses.

#6 - Legal Expenses

These incur for using the legal services by the company. These charges to the Profit and Loss Account of the company under the head legal expenses.

#7 - Bank Charges

The fees charged by the banks for the general transactions going in the business are known as the bank charges. For example, transaction charges for cheque fees, etc.

#8 - Repair and Maintenance Expenses

The Repair and maintenance operating expense on the asset used for a production like repairing requirements of machines or the vehicles in the company.

#19 - Insurance Expenses

Such expenses incurred for taking insurance of health care, general insurance of staff, and fire insurance. The company charges these to the profit and loss account under the head insurance expenses.

#10 - Advertising Expenses

This operating expense related to the promotion and advertising forms part of the company's operating expenses as they are done to increase sales. The same, however, does not include the trade discount the company gives its customers.

#11 - Research Expenses

These operating expenses, incurred for research of the new products, are treated as revenue expenses and should not be capitalized. These are charged to the Profit and Loss account.

#12 - Entertainment Expenses

The entertainment expenses incurred for the sales and related support activities form part of the company's operating expenses.

#13 - Sales Expenses

These operating expenses incurred to increase sales are part of the sales expenses. For example, a discount on sales, the sales commission expenses, etc.

List of Operating Expense under COGS

Cost of the Goods Sold is the Costs that are incurred for the Goods or products sold by the organization during a specific period. The cost, considered while calculating the cost of goods sold, refers to the cost directly attributable to goods or products sold by the company. It includes direct labor, direct overheads, and direct material. The cost should be matched with corresponding revenues, which the entity has recognized in the income statement.

Below is the list of 6 Operating expenses that come under the Cost of Goods Sold.

#1 - Freight in Cost

is the Costs that are incurred for the Goods or products sold by the organization during a specific period. The cost, considered while calculating the cost of goods sold, refers to the cost directly attributable to goods or products sold by the company. It includes direct labor, direct overheads, and

#2 - Freight out Cost

Freight out is the cost of transportation. It is associated with the delivery of the goods from the place of the supplier to customers. And the same should be included within the cost of the goods sold classification in the income statement.

#3 - Product Cost

These are the costs that are incurred to make the product in the condition to sell it to customers. The product cost includes costs related to direct labor, direct overheads, and direct material

#4 - Rental Cost

Rental Cost is paid for the properties used for providing the support related to the production. The Salaries, wages, and other benefits are given to the staff related to the production of goods.

#5 - Depreciation Expenses

The reduction in the asset value due to wear and tear while using at the time of production is the depreciation expense. It forms part of the cost of goods sold.