What are variable expenses?

Variable expenses are costs that change over time, such as groceries or movie tickets. Because these costs might fluctuate over a week, month or year, it can be challenging to pinpoint what you’ll spend. “Variable expenses are costs that change over time. They might fluctuate over a week, month or year.”

What is a variable expense give an example?

A variable cost is a corporate expense that changes in proportion to how much a company produces or sells. Examples of variable costs include a manufacturing company’s costs of raw materials and packaging—or a retail company’s credit card transaction fees or shipping expenses, which rise or fall with sales.

What is a fixed or variable expense?

Part of creating a budget is distinguishing between your fixed and variable expenses: Fixed expenses: These are costs that largely remain constant, such as your monthly rent. Variable expenses: These are costs that vary or are unpredictable, such as dining out or car repairs.

What are some examples of fixed and variable expenses?

Examples of fixed costs are rent, insurance, depreciation, salaries, and utilities. Examples of variable expenses are direct materials, sales commissions, and credit card fees.

Is food a variable expense?

Variable costs include food, hourly wages, and utilities. These costs are harder to predict when opening a restaurant because they vary according to output.

Is water bill a variable expense?

Your utility bills may also be variable expenses because they may change from month to month.

Which of the following is the best example of a variable expense?

The correct option is (c) Wages. Wages is a variable cost because variable cost change with output and are directly associated with business activity….

How do you calculate variable expenses?

To calculate variable costs, multiply what it costs to make one unit of your product by the total number of products you’ve created. This formula looks like this: Total Variable Costs = Cost Per Unit x Total Number of Units.

Are supplies variable expense?

Variable costs are those that respond directly and proportionately to changes in activity level or volume, such as raw materials, hourly production wages, sales commissions, inventory, packaging supplies, and shipping costs.

Is savings a fixed or variable expense?

If you pay for a gym membership or streaming services, for example, those costs might stay the same month to month. Saving can also be considered a fixed expense if you’re budgeting for it regularly. For instance, you may put $100 into your emergency fund every payday.

Is food a fixed or variable expense?

Fixed costs include rent, mortgage, salaries, loan payments, license fees, and insurance premiums. These costs are easier to budget for when opening a restaurant because they don’t fluctuate much each month. Variable costs include food, hourly wages, and utilities.