Which of the following best describes operating expenses?

Operating expenses encompass all costs related to the ongoing operations of a business, excluding the direct costs of producing goods or services. This includes expenses tied to marketing, administration, and depreciation, which are crucial for supporting the company’s operational capabilities but do not directly contribute to production. These expenses are essential for running daily operations and maintaining the infrastructure required for sales and service delivery.

The other options do not accurately reflect the concept of operating expenses. For example, combining cost of goods sold with taxes does not pertain to operating expenses directly and would generally relate to calculations of gross profit or net income. A summary of sales less returns captures revenue performance but doesn’t address operating costs. Lastly, sales minus cost of goods sold gives a measure of gross profit, focusing primarily on manufacturing costs rather than the broader operating expenses necessary for business management. Thus, option C is the correct representation of operating expenses.