Question: What Is A Fixed And Variable Expense?

What are two types of expenses?

Different Types of Expenses There are two main categories of business expenses in accounting: Operating expenses: Expenses related to the company’s main activities, such as the cost of goods sold, administrative fees, and rent.

Non-operating expenses: Expenses not directly related to the business’ core operations..

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.

Which of the following is a variable expense?

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

Which of these is a variable expense?

Examples of variable costs Packaging costs. Utilities, like electricity and water. Credit card and bank fees. Hourly wages and direct labor.

What is the difference between a fixed and a variable expense?

Variable costs vary based on the amount of output produced. Variable costs may include labor, commissions, and raw materials. Fixed costs remain the same regardless of production output. Fixed costs may include lease and rental payments, insurance, and interest payments.

Is an electric bill a fixed expense?

Fixed expenses are consistent and expected bills you pay each month, such as a mortgage or rent, a cellphone bill and a student loan payment. Car insurance, home insurance and life insurance are also fixed payments, along with your monthly electric and water bills.

Which item is a fixed expense?

Fixed expenses are those expenses that do not change when there is a change in production or sales level. Expenses like rent, insurance, payment on loans, management salaries, advertising are examples of fixed costs. They change over a period of time.

What are the four types of expenses?

You might think expenses are expenses. If the money’s going out, it’s an expense. But here at Fiscal Fitness, we like to think of your expenses in four distinct ways: fixed, recurring, non-recurring, and whammies (the worst kind of expense, by far).

Is a phone bill a fixed expense?

Fixed expenses are consistent and expected bills you pay each month, such as a mortgage or rent, a cellphone bill and a student loan payment. Car insurance, home insurance and life insurance are also fixed payments, along with your monthly electric and water bills.

What is mixed Cost example?

Examples of Mixed Costs. Telephone expense: Fixed Component. Varaible Component. cost of the system, cost of calls.

What is an example of a variable expense?

Typical household variable expenses might include: The 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.

Is groceries a fixed expense?

Buying gas for your car each month is a variable expense, as are car repairs and maintenance. Grocery shopping is also a variable expense. … Variable expenses may be harder to cut back on than fixed expenses because they can affect your lifestyle.

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.

Which two expenses are considered variable nondiscretionary expenses?

Nondiscretionary expenses are things you must pay for or buy, including the following:Food.Rent or mortgage.Car payments.Utilities.

What are examples of a fixed expense?

Examples of fixed costs include rental lease payments, salaries, insurance, property taxes, interest expenses, depreciation, and potentially some utilities.