What is flexible expenditure

A flexible expense is a discretionary purchase that can be altered or eliminated without a significant downside. These are non-essential expenses that stand in contrast to fixed expenses

What is the difference between fixed & flexible expenses?

Whats the difference between “fixed” and “flexible” expenses? Fixed: expenses that are the same every month. … Flexible: expenses that can change from month to month.

Is savings a fixed or variable expense?

If you pay for a gym membership or streaming services, for example, those costs might stay the same month to month. Saving can also be considered a fixed expense if you’re budgeting for it regularly. For instance, you may put $100 into your emergency fund every payday.

Are groceries a flexible expense?

Grocery shopping is an example of a flexible expense. … It is important to note that flexible expenses may or may not be connected with necessities. For example, food is considered an essential expense in the household budget.

Is gas a fixed expense?

Utilities– the cost of electricity, gas, phones, trash and sewer services, etc. … However, utilities are generally considered fixed costs, since the company must pay a minimum amount regardless of its output.

Is cable TV a flexible expense?

For example, if a household elects to order a cable or satellite television service, the cost recurs monthly. … Even the cost of utilities such as electricity may be considered a flexible expense.

What are some examples of a flexible expense?

Flexible expense examples include groceries, dining out, entertainment, and even utilities. Learn how you can master your personal finances by cutting back on these expenses and putting more money where it matters.

Is rent a variable expense?

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.

What are 3 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.

Is Internet a fixed expense?

Fixed costs are predetermined expenses that remain the same throughout a specific period. … Some examples of fixed costs include: Rent. Telephone and internet costs.

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Is food a fixed or variable expense?

Fixed costs include rent, mortgage, salaries, loan payments, license fees, and insurance premiums. These costs are easier to budget for when opening a restaurant because they don’t fluctuate much each month. Variable costs include food, hourly wages, and utilities.

Is electricity variable or fixed cost?

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 a car payment a fixed expense?

Typical fixed expenses include car payments, mortgage or rent payments, insurance premiums and real estate taxes. … When you lower your fixed expenses, you automatically save more money each month or pay period.

Is direct labor a fixed cost?

All costs that do not fluctuate directly with production volume are fixed costs. Fixed costs include various indirect costs and fixed manufacturing overhead costs. Variable costs include direct labor, direct materials, and variable overhead.

What were the fixed expenses 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.

What does discretionary mean in business?

A discretionary expense is a cost that a business or household can survive without, if necessary. Discretionary expenses are often defined as nonessential spending. This means a business or household is still able to maintain itself even if all discretionary consumer spending stops.

What are monthly expenses?

This could be payments on anything, such as credit cards or a personal bank loan. Depending on how you categorize your expenses, you could include car or house payments here, but make sure that you are not double-counting them if you include them as transportation or housing expenses.

Are expenditures expenses?

Difference Between Expense vs Expenditure. Expense vs. Expenditure – In simple words, expenses are the costs that incur to earn revenues. Whereas, expenditure is the cost spent on purchase or growth of fixed assets.

What are different types of expenses?

• Operating. Cost of Goods Sold (COGS) It includes material cost, direct. Marketing, advertising, and promotion. Salaries, benefits, and wages. Selling, general, and administrative (SG&A) It includes expenses such as rent, advertising, marketing. …
• Non-operating. Interest. Taxes. Impairment charges.

What are the two main categories of expenses?

Key Takeaways There are two main categories of business expenses in accounting: operating expenses and non-operating expenses.

Are groceries a variable expense?

Variable expenses are costs that change over time, such as groceries or movie tickets. Because these costs might fluctuate over a week, month or year, it can be challenging to pinpoint what you’ll spend.

Is clothing a 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.

What is a intermittent expense?

Intermittent expenses. Expenses that occur at various times throughout the year and tend to be in large amounts(tuition payment, car repairs) Discretionary (non-essential) expenses. Expenses for things we don’t need (eating out, gifts, snacks)

Is cable a fixed expense?

Fixed Expenses – Definition, Examples and Lists The definition of fixed expenses is “any expense that does not change from period to period,” such as mortgage or rent payments, utility bills, and loan payments. … Utility bills (cable, cell, electricity, water, etc.) Lease / car loan payment.

What are 5 examples of variable expenses?

• 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 a student loan a variable expense?

A fixed expense is an expense that stays the same every single month. Some examples of fixed expenses you may have can include: Your mortgage or rent payment. The payment for your car, student loan or other installment loan.

Is retirement a fixed expense?

Saving for retirement, emergencies, and other financial goals could be considered a fixed expense to ensure you’re working towards building wealth and preparing for the future.

Is dog food a fixed or variable expense?

A variable expense is the opposite. It is anything that you pay for that isn’t a set amount every month. This could be groceries, Starbucks, toiletries, that cute pair of shoes you couldn’t live without, or even the expensive dog food you feed to your spoiled pup, Nuggett.

What is the prime cost?

Prime costs are a firm’s expenses directly related to the materials and labor used in production. It refers to a manufactured product’s costs, which are calculated to ensure the best profit margin for a company.

Is water fixed or variable cost?

When utility revenues stay flat or fall, managers might think that the answer is to raise fixed charges, since water service costs are largely fixed costs, which remain unchanged through- out the year regardless of the volume produced.

Is machine hours direct labor?

Common bases of allocation are direct labor hours charged against a product, or the amount of machine hours used during the production of a product. The amount of allocation charged per unit is known as the overhead rate.