Question: Are Groceries A Variable Expense?

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 insurance a variable expense?

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

Is groceries a fixed expense?

Fixed expenses are your weekly, monthly, or annual bills that don’t fluctuate. These include things like mortgage or rent payments, car payments, insurance premiums, utility bills, and the average amount you spend on groceries.

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.

Which of these is a variable expense?

Examples of variable costs Packaging costs. Utilities, like electricity and water. Credit card and bank fees. Hourly wages and direct labor.

Is a cell phone bill a fixed 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.

What are two variable expenses examples?

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

What are total variable costs?

Total variable cost is the aggregate amount of all variable costs associated with the cost of goods sold in a reporting period. … The components of total variable cost are only those costs that vary in relation to production or sales volume.

What kind of expense are groceries?

Discretionary Expenses So, groceries are a variable expense, but dining out is a discretionary expense.

What is a variable expense example?

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 three 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.

What is a fixed and variable expense?

Fixed cost includes expenses that remain constant for a period of time irrespective of the level of outputs, like rent, salaries, and loan payments, while variable costs are expenses that change directly and proportionally to the changes in business activity level or volume, like direct labor, taxes, and operational …