Operating expenses are the costs associated with running a business and producing goods and services. They include items like materials, production labour, rent, marketing, transportation, utilities, insurance and other regular daily expenses. Non-operating expenses are one-off costs that are not related to operating activities, such as legal fees from litigation or large investments. This distinction is important for companies, since it helps them determine whether their profits come from core operations, or if large non-recurring payments have been made. Accounting for both types of expenses can give businesses a clearer picture of their overall performance.