Types Of Operating Expenses On Income Statement

Operating expenses can really impact the profitability of a business.

Types of operating expenses on income statement. Non operating expenses comprise interest expense and income and other expense income. The profit or loss is determined by taking all revenues and subtracting all expenses from both operating and non operating activities. These expenses include telephone expense traveling expense utility expense sales expense rent repair maintenance bank charges legal expenses office supplies insurance salaries and wages of administrative staff research expenses etc. The income statement is one of three statements.

They re the costs a company generates that don t relate to the production of a product. These expenditures are the same as selling general and administrative expenses. Compensation and related payroll tax expenses for non production employees sales commissions though this could be interpreted as a variable cost that is therefore part of the cost of goods sold. To understand how consider the basic formula of a company s profit and loss statement.

1 most businesses will try to keep their operating expenses between 60 and 80 of their gross revenue. Examples of operating expenses include the following. The expenses incurred in connection with the sale of goods and marketing are called selling expenses. There are several categories of operating expenses the biggest of which is known as selling general and administrative expense sga.

There are various acceptable ways to report operating expenses on the income statement. You might categorize each expense within the operating expenses section using categories such as selling. Operating expenses consist of cost of sales fulfillment marketing technology and content general and administrative and other. The income statement is one of a company s core financial statements that shows their profit and loss over a period of time.

Operating expenses may also be known as selling general and administrative sg a expenses. Certain expenses are incurred for self constructed property plant and equipment or intangible asset which is recorded under the normal account heads like raw material consumed employee benefit expenses and other expenses. Operating expenses are of two types such as selling expenses and administrative expenses. Finally amazon has charged a provision for income taxes and accounted for equity method investment activity.