What is a variable expense? Officially, a variable expense is a cost that changes month to month or occurs irregularly. Unofficially, variable expenses are probably the most likely culprit for busting your budge
Building a budget is a fundamental way to save smarter. But to do that, you need a basic understanding of fixed and variable expenses—and how they can impact your ability to stick to a budget. What is a fixed expense? Fixed expenses stay the same every month. They’re predictable and ...
What is a variable expense?Variable Expense:If you are setting up your home budget, you need to make sure that your monthly costs that are stable are covered. Expenses like rent, utilities, or car payments are ones that do not change and are fixed expenses that you have little control ...
A related concept under accrual accounting is prepaid expenses. Accrued expenses represent the expenditures incurred before cash is paid, but there are also cases where cash is paid before the expenditures are incurred. Such expenditures are known as prepaid expenses. Prepaid expenses are an asset on...
Unlike a fixed cost, a variable cost can be much more difficult to budget, and may at times exceed the limits of the budget when related to an unexpected expense. One of the easiest ways to understand a variable cost is by applying the principle to the household utilities. Each monthly ...
One of the best ways to manage a fixed expense is to schedule an automatic payment to process on a recurring basis. When the size and timing of the payment is predictable, paying it manually every month takes up focus you could be using elsewhere in your budget. What are variable expenses...
Total variable expenses / Total Net Sales, or dividing the variable expense of each unit by the price per unit. Let’s consider an example to understand this better. A cricket manufacturing unit makes a sale of 10,000 in a year. Cost of each cricket bat is ₹200. The variable cost ...
Fixed expenses are those that remain constant within your budget, although they may change occasionally. For example, your cell phone bill is a fixed expense, but if you switch to a new cell phone service, the fixed cost will change. ...
Definition: Interest expense is the cost incurred by an company for the use of another firm’s resources typically in the form of a loan. Loan agreements outline the interest rate, terms associated with the debt, and payment structure.What...
What Does Variable Cost Mean?Fixed costs, on the other hand, do not fluctuate with the production levels. Fixed costs are always the same. A good example of a fixed cost is rent. It doesn’t matter whether the piano manufacturer makes 10 pianos or 100 pianos, the rent expense will ...