Difference Between Operating Expenses And Cost of Goods Sold

 

Operating Expenses are those expenses which are incurred in the daily operations of the business and such expenses are not related to the cost of production. Rent Expenses, Telephone Expenses, Office Supplies Expenses, Selling And Marketing Expenses, Administrative Expenses, etc. are the examples.

Cost of Goods Sold is related to the cost of production in order to produce goods or products in order to sold these to end customers. It is the direct cost incurred to earn direct revenue for the business. For example, a company manufactures tables, then all the relevant costs incurred in producing tables are added in order to calculate the cost of goods sold for the period.