What does operating expenses include?

Operating expenses refer to the costs necessary for running a business on a daily basis, excluding the costs of goods sold. These expenses typically include items such as rent, utilities, payroll, and other overhead costs required to support the business's operations. By focusing on these ongoing costs, businesses can get a clearer picture of their operational efficiency and profitability.

The other options do not accurately represent what operating expenses are. For example, the cost of goods sold pertains to the direct costs associated with the production of goods sold by a company, which is separate from operating expenses. Yearly profit calculations involve broader financial metrics and accounting practices, which encapsulate income minus all expenses, while non-operating income relates to revenue earned from sources outside the primary business operations and is not considered an expense. Thus, the inclusion of costs such as rent, utilities, and salaries as operating expenses is what makes this option accurate and relevant.