Are Drawings Variable Expense

What are 4 examples of variable expenses?

Examples of variable costs are sales commissions, direct labor costs, cost of raw materials used in production, and utility costs.

Which expense is a variable expense?

Variable expenses are defined as such because the amount you spend may vary each month. Although variable costs are quite often discretionary expenses, some may be necessities. Buying gas for your car each month is a variable expense, as are car repairs and maintenance. Grocery shopping is also a variable expense.

What are 5 examples of variable expenses?

Here are a number of examples of variable costs, all in a production setting: Direct materials. The most purely variable cost of all, these are the raw materials that go into a product. Piece rate labor. Production supplies. Billable staff wages. Commissions. Credit card fees. Freight out.

Is not an example of variable expenses?

Cost Accountancy is the science, art and ………………. Q. Which of the following is not an example of variable cost B. piece-rate wages paid to manufacturing workers C. wood used to make furniture D. commissions paid to sales personnel Answer» a. straight line depreciation on a machine expected to last five years.

What are two types of variable expenses?

Variable costs vary based on the amount of output produced. Variable costs may include labor, commissions, and raw materials. Fixed costs remain the same regardless of production output. Fixed costs may include lease and rental payments, insurance, and interest payments.

How do I find variable expenses?

To calculate variable costs, multiply what it costs to make one unit of your product by the total number of products you’ve created. This formula looks like this: Total Variable Costs = Cost Per Unit x Total Number of Units.

Which expenses are fixed and which are variable?

Fixed expenses: These are costs that largely remain constant, such as your monthly rent. Variable expenses: These are costs that vary or are unpredictable, such as dining out or car repairs.

Which two expenses are considered variable non discretionary expenses?

Variable, nondiscretionary expenses are as follows: Food. Utilities.Show Me the Money Food. Utilities. Entertainment. Vacations.

What are some examples of fixed and variable costs?

Examples of fixed costs are rent, insurance, depreciation, salaries, and utilities. Examples of variable expenses are direct materials, sales commissions, and credit card fees.

Is entertainment a variable expense?

Variable expenses include such things as groceries, gas for your vehicle, utilities, entertainment expenses, and clothing. By keeping track of these expenses over time, you can get a better idea of how much you’re spending each month and plan accordingly.

Is food a variable expense?

A variable expense is one that fluctuates each month. Some examples of variable expenses you may have can include: Food expenses.

What are the variable expenses per unit?

Definition: Variable cost per unit is the production cost for each unit produced that is affected by changes in a firm’s output or activity level. Unlike fixed costs, these costs vary when production levels increase or decrease.

Which expense is considered a fixed expense?

Fixed expenses or costs are those that do not fluctuate with changes in production level or sales volume. They include such expenses as rent, insurance, dues and subscriptions, equipment leases, payments on loans, depreciation, management salaries, and advertising.

What is another name for variable cost?

Variable costs are sometimes called unit-level costs as they vary with the number of units produced. Direct labor and overhead are often called conversion cost, while direct material and direct labor are often referred to as prime cost. In marketing, it is necessary to know how costs divide between variable and fixed.

Is Netflix a fixed expense?

Why Netflix’s operating margins have been expanding The company’s operating margin has been expanding primarily because Netflix pays for its single largest expense — content — on a fixed-cost basis.

Are utilities fixed or variable?

Utilities– the cost of electricity, gas, phones, trash and sewer services, etc. 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.

How do you plan variable expenses?

Budgeting for variable expenses is an inexact science, but there are ways to make it easier. Use the Average of Your Expenses. Treat Variable Expenses Like Fixed Expenses. Inflate Estimated Costs for Your Variable Expenses. Do Your Best to Plan in Advance.

What are the 3 types of expenses?

There are three major types of expenses we all pay: fixed, variable, and periodic.

What are some examples of non-discretionary expenses?

Non-discretionary spending is essential and non-negotiable spending defined within a budget. What are Non-Discretionary examples? Examples of these expenses include: rent, food, or mortgage payments. In contrast, discretionary spending refers to non-essential expenses, such as hobbies and travel.

What are the different types of expenses that must be considered in budgeting?

The Essential Budget Categories Housing (25-35 percent) Transportation (10-15 percent) Food (10-15 percent) Utilities (5-10 percent) Insurance (10-25 percent) Medical & Healthcare (5-10 percent) Saving, Investing, & Debt Payments (10-20 percent) Personal Spending (5-10 percent).

Are taxes variable cost?

Variable costs are volume-related and change with the changes in output level. Depreciation, interest paid on capital, rent, salary, property taxes, insurance premium, etc. Commission on sales, credit card fees, wages of part-time staff, etc.

Are cogs and variable costs the same?

COGS is a very specific financial concept that includes only those business expenses required to produce goods, such as raw materials and wages for labor required to create or assemble the product. COGS is comprised of fixed costs and variable costs, which in turn have a large effect on gross profit.

Is clothing a fixed or variable expense?

What Are Variable Costs? Variable costs are unfixed, discretionary costs that include gas, clothing, entertainment, pet supplies and dining out at restaurants. Your electric bill is a variable expense, too, unless you’ve arranged to have even billing, where the payment doesn’t change from month to month.

Is cable TV 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. A digital subscription to a newspaper and monthly cable or streaming services are additional fixed costs.

Are donations a variable expense?

Examples of variable expenses include: donations to charities. gifts to employees and customers. employee training.