Operating cost?

Hello im new to this forum.i had a doubt in the Operating cost chapter of costing. What exactly is the crux of this chapter? what are we trying to calculate? what is the meaning of passenger kilometres? thank you.
Replies (1)

Operating costs are the expenses which are related to the operation of a business, or to the operation of a device, component, piece of equipment or facility. They are the cost of resources used by an organization just to maintain its existence.

Business operating costs

For a commercial interprise, operating costs fall into two 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.
  • 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, Express Mail, Janitorial Supplies, MRO, Office Products, Payroll Services,Telecom, Uniforms, Utilities, or Waste Disposal etc

Passenegr killomoitter

The units of transportation measurement describes the units of measure to measure the quantity and traffic of transportation used in transportation statistics, planning, and their related fields.

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