Operating Expense Calculator

Formula

The formula to calculate the operating expense is:

\[ \text{OE} = S + C + A + R + U \]

Where:

$ \text{OE} $ is the operating expense ($).
$ S $ is the total salaries ($).
$ C $ is the total commissions ($).
$ A $ is the advertising cost ($).
$ R $ is the rental or building cost ($).
$ U $ is the utilities ($).

What is Operating Expense?

Operating expense refers to the total cost associated with the day-to-day operations of a business. These costs include salaries, commissions, advertising expenses, rental or building costs, and utilities. Operating expenses are crucial for determining a business's profitability and operational efficiency.

Example Calculation

Let's consider an example:

Total Salaries (S): $50,000
Total Commissions (C): $10,000
Advertising Cost (A): $5,000
Rental or Building Cost (R): $20,000
Utilities (U): $3,000

Using the formula to calculate the operating expense:

\[ \text{OE} = 50,000 + 10,000 + 5,000 + 20,000 + 3,000 = 88,000 \text{ dollars} \]

This means that the total operating expense for this scenario is $88,000.