Yes, fixed expenses remain “fixed” regardless of your business activity, sales, and production. If an expense fluctuates with these variables, it is called a “variable cost”. You can count on fixed costs to
when a firm starts a new project, they try to project future expenses. This is known as the average variable expense of the project. In addition, raw materials, production costs, delivery costs, packaging, and labor tariffs are variableexpenses. ...
While expenditure is the payment or the incurrence of a liability, expenses represent the consumption of an asset. For example, your company has made an expenditure of $10,000 in cash to purchase a fixed asset. This asset, however, would be charged as an expense over the term of its usef...
A variable cost is a type of corporate expense that changes depending on how much (or how little) your company produces or sells. Depending on how your sales or production rates are going, your variable costs can rise or fall—hence the name. ...
Prepaid expenses represent expenditures that have not yet been recorded by a company as an expense, but have been paid in advance. In other
But if like many businesses, we don't pay our expenses the same day they occur, there will be a liability (debt), which we will pay later. Perhaps an even better definition of an expense might be:A short-term or repeating service or item that we use up and need to pay for.Example...
Examples of semi-variable overheads includesales commissions, vehicle usage, and some utilities such as power and water costs that have a fixed charge plus an additional cost based on the usage. Examples of Overhead Costs Overhead costs are important in determining how much a company must charge...
Selling and administrative expenses include both variable selling and administrative expenses (those that change by the time period or with the number of units sold) and fixed selling and administrative expenses (those that do not change over the course of a year).Creating...
A cost such as sales commissions would not be considered an administrative expense, as it is directly related to revenue generation. Characteristics of Administrative Expenses There are several ways to distinguish between different types of administrative expenses such as if they are fixed, variable, ...
The distribution property states that the product of a number by an addition or subtraction of two numbers is equal to the sum or difference of products.