Cost of operation

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Cost of operation

The cost of operation is all the money a business spends to run normally. It includes fixed costs (rent, salaries, insurance) and variable costs (raw materials, utilities, production expenses). Understanding these costs helps a company price its products and stay profitable.

See also:
- Operating cost
- Operations management
- Loss leader

References:
- Cambridge English Dictionary: operating cost definition.
- Clark, J. Maurice (1923). Overhead costs in modern industry. Journal of Political Economy.