True or False: Operating costs include payroll.

Operating costs indeed include payroll. This is because operating costs refer to the expenses that are necessary to run a business on a day-to-day basis. These expenses cover a wide range of items such as utilities, rent, materials, and labor costs. Payroll, which encompasses wages, salaries, and benefits provided to employees, is a crucial part of maintaining the workforce that keeps the business functioning.

The inclusion of payroll in operating costs highlights the importance of human resources in generating revenue and delivering the product or service. Without proper staff compensation, a business would struggle to operate effectively. Thus, categorizing payroll as part of operating costs reflects the reality of financial management in any organization.