Flexible expenses are controllable costs that vary from week to week or month to month. Cutting costs by adjusting flexible expenses is easier than cutting fixed expenses, as fixed expenses remain constant, typically based on contractual agreements.
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What is the difference between fixed expenses and flexible expenses?
In their most basic sense, fixed expenses do not change over time and flexible expenses do. In most individuals’ budgets, monthly mortgage or rent payments are fixed.Flexible expenses may change each month or only occur during certain times of the year.
How do you flexible expenses differ from fixed expenses apex?
Why are fixed expenses difficult to reduce?How do flexible expenses differ from fixed expenses? Flexible expenses vary over time. Once all unnecessary expenses have been removed from your budget, what can you do if your expenses still exceed your income?
What is the difference between fixed cost and fixed expenses?
What Is the Difference Between Fixed Cost and Variable Cost? In accounting, fixed costs are expenses that remain constant for a period of time irrespective of the level of outputs. Variable costs are expenses that change directly and proportionally to the changes in business activity level or volume.
What is flexible expense?
A flexible expense is a discretionary purchase that can be altered or eliminated without a significant downside.Flexible expenses should be included in a budget to manage an individual’s overall finances.
Is flexible expense and periodic expense the same?
Flexible expenses are any monthly expenditure that can easily be changed, reduced, or eliminated from your budget. These expenses include things like your cable subscription and grocery bill. Periodic expenses are incurred costs that happen less frequently than monthly.
What is the difference between fixed and variable costs?
Companies incur two types of production costs: variable costs and fixed costs. Variable costs vary based on the amount of output produced.Fixed costs remain the same regardless of production output. Fixed costs may include lease and rental payments, insurance, and interest payments.
How do flexible expenses differ from fixed expenses quizlet?
How do flexible expenses differ from fixed expenses? Flexible expenses vary over time. What can you do in addition to cutting all unnecessary expenses to make sure your expenses don’t exceed your income? Get another job to increase income.
What is the difference between a fixed expense and a flexible expense list two examples of each type of expense?
Fixed: expenses that are the same every month. EX: car payment. Flexible: expenses that can change from month to month. EX: groceries.
Are clothes a flexible expense?
Various articles of clothing are examples of flexible expenses. The consumer has the option of purchasing garments that are available at a discount, or buying similar items that are sold at full price.
What is the difference between fixed and variable costs quizlet?
A variable cost varies, in total, in direct proportion to changes in the level of activity. A fixed cost is a cost that remains constant, in total, regardless of changes in the level of activity.
What does fixed cost mean?
The term fixed cost refers to a cost that does not change with an increase or decrease in the number of goods or services produced or sold. Fixed costs are expenses that have to be paid by a company, independent of any specific business activities.
What is an example of a fixed cost?
Examples of Fixed Expenses
Fixed expenses can include essential expenses, such as those needed to maintain a basic standard of living each month. Some of the most common fixed expense samples include: Rent or mortgage payments. Renter’s insurance or homeowner’s insurance.
Does flexible budget include fixed costs?
A flexible budget adjusts based on changes in actual revenue or other activities.This approach varies from the more common static budget, which contains nothing but fixed expense amounts that do not vary with actual revenue levels.
How do you calculate flexible expenses?
To compute the value of the flexible budget, multiply the variable cost per unit by the actual production volume. Here, the figure indicates that the variable costs of producing 125,000 should total $162,500 (125,000 units x $1.30).
What are periodic fixed expenses?
Fixed expenses include your rent and other bills that are the same amount every month. Your fixed expenses also include occasional expenses that are billed once every few months or once a year. These are called periodic fixed expenses.
What are the 4 types of expenses?
Terms in this set (4)
- Variable expenses. Expenses that vary from month to month (electriticy, gas, groceries, clothing).
- Fixed expenses. Expenses that remain the same from month to month(rent, cable bill, car payment)
- Intermittent expenses.
- Discretionary (non-essential) expenses.
What are the three types of expenses?
Fixed expenses, variable expenses, and irregular expenses are the three categories that make up your budget, and are vitally important when learning to manage your money properly. When you’ve committed to following a budget, you must know how to put your plan into action.
What is the difference between fixed and variable?
The difference between fixed and variable costs is that fixed costs do not change with activity volumes, while variable costs are closely linked to activity volumes. Thus, fixed costs are incurred over a period of time, while variable costs are incurred as units are produced.
Why is it important to differentiate between fixed and variable costs?
In short, knowing and managing variable costs is essential as you respond to changes in the marketplace and in your company’s growth patterns. A solid understanding of your company’s fixed and variable costs is what allows us to identify the profitable price level for its products or services.
What is the difference between fixed and variable overhead?
Fixed overhead costs are constant and do not vary as a function of productive output, including items like rent or a mortgage and fixed salaries of employees. Variable overhead varies with productive output, such as energy bills, raw materials, or commissioned employees’ pay.