What are examples of variable expenses?

What are 4 examples of variable expenses?

Examples of variable costs are raw materials, piece-rate labor, production supplies, commissions, delivery costs, packaging supplies, and credit card fees. In some accounting statements, the Variable costs of production are called the “Cost of Goods Sold.”

What would be considered a variable expense?

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.

Which is the best example of a variable expense?

Common examples of variable costs include costs of goods sold (COGS), raw materials and inputs to production, packaging, wages, and commissions, and certain utilities (for example, electricity or gas that increases with production capacity).

Which is an example of a variable expense category?

Examples of variable expenses

Common variable expenses include: Groceries and dining out. Clothing. Personal care.

Fixed and Variable Expenses

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.

Is rent a variable expense?

Fixed expenses generally cost the same amount each month (such as rent, mortgage payments, or car payments), while variable expenses change from month to month (dining out, medical expenses, groceries, or anything you buy from a store).

Is water bill a 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.

What are some examples of fixed and variable costs?

Fixed costs remain the same throughout a specific period. Variable costs can increase or decrease based on the output of the business. Examples of fixed costs include rent, taxes, and insurance. Examples of variable costs include credit card fees, direct labor, and commission.

Is a car payment a variable expense?

A car loan is a fixed expense. Here's the difference: Fixed expense—you pay the same amount each month (ex: rent, health insurance) Variable expense—you pay a different amount each month (ex: water, power, groceries)

Is rent a fixed or variable expense?

Fixed expenses or costs are those that do not fluctuate with changes in production level or sales volume. They include such expenses as rent, insurance, dues and subscriptions, equipment leases, payments on loans, depreciation, management salaries, and advertising.

Is salary a variable cost?

Annual salaries are fixed costs but other types of compensation, such as commissions or overtime, are variable costs.

Is health insurance a variable expense?

Your health insurance, car insurance, life insurance, and homeowners or renters insurance are also examples of fixed costs.

Is phone a variable cost?

Telephone expenses are another example of a semi-variable cost. Regardless of usage, a customer still receives a fixed charge each month for basic phone service. As long-distance usage increases, costs increase.

Is cable TV a variable expense?

Car insurance, home insurance and life insurance are also fixed payments, along with your monthly electric and water bills. A digital subscription to a newspaper and monthly cable or streaming services are additional fixed costs.

Is Internet a variable expense?

Some examples of fixed costs include: Rent. Telephone and internet costs.

Are credit cards fixed or variable expenses?

Some examples of variable expenses include: Utility bills (electricity, water, gas, etc.) Car repairs. Credit card payments.

Is a student loan a variable expense?

Fixed expenses are those that remain relatively static from month-to-month. So this category includes things like phone and cable bills, mortgage or rent, health insurance, subscription services like Netflix, student loan payments, car insurance and more.

Is electricity fixed or variable cost?

The cost of electricity is an indirect cost since it can't be tied back to the product or the specific machine. However, the cost of electricity is a variable cost since electricity usage increases with the number of products that are produced or manufactured.

Are office supplies fixed or variable?

Office supplies is an example of variable cost overhead. Office supplies are considered overhead because they do not directly create revenues. Electricity is a cost that can vary from month to month and is a variable overhead cost unless it is part of the production process.

Are part time workers variable cost?

Companies might hire part-time employees to produce units to increase production. They can note the hiring of part-time employees as a variable expense if they can calculate the number of hours worked per number of units produced.

What are 5 fixed expenses?

Examples of Fixed Expenses

Rent or mortgage payments. Renter's insurance or homeowner's insurance. Cell phone service. Internet service.

What are variable costs in a business?

A variable cost is an expense that rises or falls in direct proportion to production volume. Variable costs differ from fixed costs, which remain the same even as production and sales volume changes. Common variable costs include: Raw materials.

Which one of the following is most likely a variable cost?

1. The correct answer is A. Direct Materials.