What does high operational cost mean?

High operational cost is when the expenses which are related to the operation of the business is too high.

Definition of operational cost

According to Investopedia, operating, or operational costs are 'expenses associated with the maintenance and administration of a business on a day-to-day basis. The total operating cost for a company includes the cost of goods sold, operating expenses as well as overhead expenses'.

Operational costs can include many components of operating expenses, including:

  • accounting and legal fees;

• bank charges

• sales and marketing costs

• travel expenses

• entertainment costs

• non-capitalized research and development expenses

• office supply costs

• rent

• repair and maintenance costs

• utility expenses

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Last edited on 16 April 2020.