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![]() Therefore, the cost is fixed.Įxamples of fixed costs include overhead costs, such as:įixed costs can boost a company's profitability as it increases scalability. While a company can find a cheaper factory space, it still has to pay for space to house its equipment and manufacturing processes. An example of a fixed cost is the rent paid for the factory space used by a manufacturing company which must be paid, regardless of the company's productivity or profitability. Operating costs can fall into three broad categories, including:Ī fixed cost is an operating cost which a company must pay and remains constant irrespective of a company's productivity or performance. ![]() What Are the Components of Operating Cost? A large part of a business's income goes into its operating costs. It can be expressed as the summation of operating expenses and cost of goods sold. ![]() Operating cost is an element of a business' operating income as reflected in the financial statements of the organization. Operating cost can be defined as the cost of running the administrative and maintenance functions of a business on a daily basis. Examples of Operating Costs Definition of Operating Cost What Are the Components of Operating Cost? 3.
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