What are variable costs give examples?

Examples of variable costs are sales commissions, direct labor costs, cost of raw materials used in production, and utility costs. Variable costs are usually viewed as short-term costs as they can be adjusted quickly.

What are 4 common variable expenses?

Examples of Household Variable Expenses

The cost of household maintenance such as painting or yard care. General expenses such as clothing, groceries, and car maintenance. Resource expenses such as fuel, electricity, gas, and water. Other expenses such as entertainment or dining out.

What are some examples of fixed and variable costs?

Examples of fixed costs include rent, taxes, and insurance. Examples of variable costs include credit card fees, direct labor, and commission.

What are variable expenses in business?

Variable costs are any expenses that change based on how much a company produces and sells. This means that variable costs increase as production rises and decrease as production falls. Some of the most common types of variable costs include labor, utility expenses, commissions, and raw materials.

Is food a variable expense?

Variable expenses include such things as groceries, gas for your vehicle, utilities, entertainment expenses, and clothing.

Which of the following is a variable cost?

Wages are variable costs in a firm, as the number of employees required will vary based on the demand for production, therefore the wages paid to the total number of employees will vary with the number of employees.

Is salary a variable cost?

If you pay an employee a salary that isn’t dependent on the hours worked, that’s a fixed cost. Other types of compensation, such as piecework or commissions are variable. Annual salaries are fixed costs but other types of compensation, such as commissions or overtime, are variable costs.

Is electricity a variable cost?

However, the cost of electricity is a variable cost since electricity usage increases with the number of products that are produced or manufactured. In short, if the total cost associated with the cost object changes when the production amount changes, it’s likely a variable cost.

Are wages a variable cost?

Variable costs vary with increases or decreases in production. Fixed costs remain the same, whether production increases or decreases. Wages paid to workers for their regular hours are a fixed cost. Any extra time they spend on the job is a variable cost.

What are the 3 types of expenses?

There are three major types of expenses we all pay: fixed, variable, and periodic. Do you know the difference?

What is a variable expense for most adults?

Variable expenses refer to expenses that change from time to time. An example of variable expenses is the monthly expenses for eating out in restaurants. This is because there is no defined number of times an individual should eat in a restaurant. Thus, the cost of eating in restaurants varies every month.

What are fixed and variable expenses?

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 a credit card a variable expense?

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

Is tuition a fixed or variable cost?

Fixed expenses
Fixed expenses don’t change (very often)

The biggest fixed expenses you’ll have in college are tuition, room and board, as well as your car payment (if you have one), car insurance premiums (if you have a car), as well as your wireless plan and internet service.

Is health insurance a variable expense?

Your health insurance, car insurance, life insurance, and homeowners or renters insurance are also examples of fixed costs. You would have to spend several hours researching alternate plans to change these monthly payment amounts.

Is utilities a fixed or variable cost?

Some utilities, such as electricity, may increase when production goes up. However, utilities are generally considered fixed costs, since the company must pay a minimum amount regardless of its output.

Is electricity a variable expense?

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.

Is rent a fixed cost?

Fixed costs include any number of expenses, including rental lease payments, salaries, insurance, property taxes, interest expenses, depreciation, and potentially some utilities. For instance, someone who starts a new business would likely begin with fixed costs for rent and management salaries.

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.

Is salary a variable cost?

If you pay an employee a salary that isn’t dependent on the hours worked, that’s a fixed cost. Other types of compensation, such as piecework or commissions are variable. Annual salaries are fixed costs but other types of compensation, such as commissions or overtime, are variable costs.

Is a plumbing bill fixed or variable?

What Are Fixed Expenses? 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.