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What is an Operational Expense?

Operational Expense (Definition)

An operational expense is another term for operating expense. Operating expenses are the costs of running a business, but they don't include the costs of making or delivering a product or service. Different types of operational expense include office supplies, such as printer paper; depreciation from items the company buys that lose value, like computers and vehicles; and advertising – business cards, social media expenses, print ads. Other operational expenses might include buying and storing raw materials and stock; the cost of renting a factory, office, or retail space; employee wages, benefits and taxes; repair costs for replacing and fixing broken equipment or structures; utilities such as phone and electricity costs; insurance for the business and property; and even travel expenses for business trips.

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