Question

Designing, marketing, customer services, research and development expenses are operating costs. True False

Answer 1

The statement is "True".

First let's understand what operating costs are : Operating costs are expenses which are associated with the administration and maintenance of the day-to-day business activities. These are related to the operations of the business or to the operation of a component or facility. It represents the cost of resources that the organization needs to incur to keep carrying on its usual activities such as manufacturing, developing and designing products, selling such products and providing after sale services to keep the customers satisfied.

Hence from the above definition it is evident that designing, marketing, customer services, research and development expenses are all covered under operating costs. Non-operating costs are costs that are not related to the day-to-day activities of the business such as interest expense.