Operating Costs

For a commercial enterprise, operating costs fall into three broad categories:

  • Fixed costs, which are the same whether the operation is closed or running at 100% capacity. Fixed Costs include items such as the rent of the building. These generally have to be paid regardless of what state the business is in. it never changes
  • Variable costs, which may increase depending on whether more production is done, and how it is done (producing 100 items of product might require 10 days of normal time or take 7 days if overtime is used. It may be more or less expensive to use overtime production depending on whether faster production means the product can be more profitable). Variable Costs include indirect overhead costs such as Cell Phone Services, Computer Supplies, Credit Card Processing, Electrical use, Couriers and shipping, cleaning services, Office supplies, Payroll Services, Telecom, Uniforms, Utilities, or Waste Disposal etc.
  • Semi variable costs, the expenses necessary to keep the business in proper condition.

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For a commercial enterprise, operating costs fall into three broad categories:

  • Fixed costs, which are the same whether the operation is closed or running at 100% capacity. Fixed Costs include items such as the rent of the building. These generally have to be paid regardless of what state the business is in. it never changes

 

  • Variable costs, which may increase depending on whether more production is done, and how it is done (producing 100 items of product might require 10 days of normal time or take 7 days if overtime is used. It may be more or less expensive to use overtime production depending on whether faster production means the product can be more profitable). Variable Costs include indirect overhead costs such as Cell Phone Services, Computer Supplies, Credit Card Processing, Electrical use, Couriers and shipping, cleaning services, Office supplies, Payroll Services, Telecom, Uniforms, Utilities, or Waste Disposal etc.

 

  • Semi variable costs, the expenses necessary to keep the business in proper condition.

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