Quick Answer: What Is Considered A Variable Expense?

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 ….

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.

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.

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.

Is a cell phone bill a fixed or variable 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.

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 is a fixed and variable expense?

For personal budgeting purposes, fixed expenses are the costs that you can forecast with confidence because they don’t change from month to month or period to period. … As these examples show, although discretionary spending is often a variable expense, variable expenses can be necessities, too.

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.

What are three variable expenses?

What are Examples of Variable Costs?Direct materials. The most purely variable cost of all, these are the raw materials that go into a product.Piece rate labor. … Production supplies. … Billable staff wages. … Commissions. … Credit card fees. … Freight out.

Is food a variable expense?

A variable expense is one that fluctuates each month. Some examples of variable expenses you may have can include: Utility bills such as electric, gas and water. Food expenses.

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.