An expense is variable when its total amount changes in proportion to the change in sales, production, or some other activity. In other words, a variable expense increases when an activity increases, and it dec
What are variable expenses? Variable expenses are costs that can change each month depending on your usage or consumption. Examples of variable expenses include groceries, gas, electricity, dining out, personal care, clothing and entertainment. Spending in these areas can range widely depending on th...
Part ofcreating a budgetis distinguishing between fixed and variable expenses. Fixed expenses are costs that largely remain constant, such as your monthly rent or mortgage. Variable expenses, on the other hand, are costs that may vary or be unpredictable, such as a car repair or a medical bil...
13. What are Variable Expenses? That does not fluctuate with changes in production level. Costs that change over time. Expense contains both a fixed-cost component and a variable cost component. Expenses that occur at various times throughout the year. ...
Expenses are often divided into two major classifications: Operating expenses which involve a company’s main activities. A retailer’s operating expenses include the cost of goods sold and its selling, general and administrative expenses. Inside the company, these will likely be sorted by department...
This article will explain the difference between fixed and variable expenses with examples of each.Fixed Expenses Fixed expenses are costs that typically don’t change in amount from month to month. They are more predictable since they remain the same, making them easier to plan for....
Variable costs are the types of expenses that are a little harder to predict because they either don’t occur regularly or the amount changes. Discretionary expenses like your Starbucks habit or those necessities that you can predict but don’t plan for—holiday gifts, or your twice annual insu...
Examples of Variable Operating Costs Raw Materials: Costs of components or supplies needed for manufacturing products. Direct Labor: Wages for employees who are paid based on hours worked or units produced. Shipping and Logistics: Expenses for delivering goods to customers, which vary with order volu...
When production decreases, these expenses drop. Variable costs also vary by industry, so it's important for anyone analyzing companies to make comparisons between those that are in the same industry. Examples of variable costs include the cost of labor, utilities, raw materials, shipping costs,...