Business Glossary

costs associated with the selling and administrative activities of the company; also called nonmanufacturing expenses. They represent a period cost related to time rather than to the product. They are subdivided into selling expense and general and administrative expenses .

amounts paid to maintain property, such as property taxes , utilities , hazard insurance . Excludes financing expenses and depreciation .

Example: The following operating expenses are incurred:

• maintenance
• management
• real estate taxes
• hazard and liability insurance
• utilities
• supplies
  The following are not categorized as operating expenses:
• debt service
  principal payments
  interest
  loan fees
  participation payments
• depreciation
• income taxes