Question: What Are Three Variable Expenses?

Which example is a fixed expense?

Fixed Expenses Definition.

Fixed expenses are those expenses that stay the same regardless of your sales or business activity and can have a significant impact on your cash flow and budget.

Expenses like rent or mortgage, insurance, salaries, and some utilities fall into the category of fixed expenses..

Is rent a variable expense?

Fixed cost includes expenses that remain constant for a period of time irrespective of the level of outputs, like rent, salaries, and loan payments, while variable costs are expenses that change directly and proportionally to the changes in business activity level or volume, like direct labor, taxes, and operational …

Is food a fixed or variable expense?

Fixed expenses are your weekly, monthly, or annual bills that don’t fluctuate. These include things like mortgage or rent payments, car payments, insurance premiums, utility bills, and the average amount you spend on groceries. … variable expenses in your budget, then focus on getting rid of the fixed costs.

What are the 3 types of expenses?

There are three major types of expenses we all pay: fixed, variable, and periodic. Do you know the difference?

Is rent a fixed or variable expense?

Fixed costs remain the same regardless of whether goods or services are produced or not. … The variable costs change from zero to $2 million in this example. The most common examples of fixed costs include lease and rent payments, utilities, insurance, certain salaries, and interest payments.

What are monthly expenses?

Create a list of monthly expenses. While this includes your recurring living expenses, such as your rent or mortgage, car payment, and utilities, it also includes the more variable amounts you spend on haircuts, groceries, and clothes each month. Examine your expenses.

What are variable expenses in a budget?

Variable expenses are defined as such because the amount you spend may vary each month. Although variable costs are quite often discretionary expenses, some may be necessities. Buying gas for your car each month is a variable expense, as are car repairs and maintenance. Grocery shopping is also a variable expense.

How do you reduce variable costs?

Ways to Reduce Variable CostsScrutinize your products or services. Find out which of them are the most or the least cost-effective. … Make variable costs your target. … Question every aspect of your business. … Monitor your variable cost constantly.

Is eating out a variable expense?

Variable expenses are costs that change over time. They might fluctuate over a week, month or year. … Other examples include clothing, vacation costs, holiday gifts and eating out.

What are some examples of variable expenses?

Examples of Household Variable ExpensesThe cost of household maintenance such as painting or yard care.General expenses such as clothing, groceries, and car maintenance.Resource expenses such as fuel, electricity, gas, and water.Other expenses such as entertainment or dining out.

What are variables expenses?

Variable expenses are costs that change over time. … Fixed expenses such as car payments generally stay the same, but variable expenses change over time.

How do you determine variable expenses?

Calculate total variable cost by multiplying the cost to make one unit of your product by the number of products you’ve developed. For example, if it costs $60 to make one unit of your product, and you’ve made 20 units, your total variable cost is $60 x 20, or $1,200.

Is electricity a fixed expense?

Utilities– the cost of electricity, gas, phones, trash and sewer services, etc. Some utilities, such as electricity, may increase when production goes up. However, utilities are generally considered fixed costs, since the company must pay a minimum amount regardless of its output.

Is health insurance a variable expense?

It’s much easier to budget for fixed expenses than it is to budget for a variable expense or discretionary expense. … Your health insurance, car insurance, life insurance and homeowners or renters insurance are also examples fixed costs.

Which of the following is a variable expenses?

Utilities payments. Automobile usage expenses, like fuel and maintenance. Office supplies.

What are the 4 types of expenses?

Terms in this set (4)Variable expenses. Expenses that vary from month to month (electriticy, gas, groceries, clothing).Fixed expenses. Expenses that remain the same from month to month(rent, cable bill, car payment)Intermittent expenses. … Discretionary (non-essential) expenses.

What are two variable expenses examples?

Examples of variable costs are sales commissions, direct labor costs, cost of raw materials used in production, and utility costs. The total variable cost is simply the quantity of output multiplied by the variable cost per unit of output.