Budgeting-Fixed and Variable Expenses

Budgeting-Fixed and Variable Expenses

Fixed Cost

Fixed costs are expenses that a company pays that do not change with production levels. Rent is one example.

Common Budgeting Fixed Costs

-Rent
-Insurance
-Car payments
-Groceries

Common Budgeting Variable Costs

-Entertainment
-Dining out
-Clothing
-Gasoline
-Utility bill
-Electric bill

Let's Watch!

Budget: Fixed Expenses vs Variable Expenses - YouTube

Let's Practice Together

We are helping our friend, Max, sort out his budget for his upcoming date. Let's go through the list of things Max will need to help him determine if the expenses are fixed or variable.

Multiple Choice

Max will need a car and has to pay his parents $15.00 each time he takes the family car. Is this a fixed or variable expense?

• Fixed

• Variable

Multiple Choice

Max will also have to fill the gas tank back up, once he is done with the car. Max is not sure where his date will want to go or the price of gasoline.

• Fixed

• Variable

Multiple Choice

Max wants to pick his date up some flowers from the flower shop, they do a great job at custom designs.

• Fixed

• Variable

Multiple Choice

Max is not sure what his date will want to eat, but he knows that he is paying for dinner tonight.

• Fixed

• Variable

Multiple Choice

Max believes that no matter what, he is always going to tip a waiter $20.00 when he goes out to eat.

• Fixed

• Variable

Multiple Choice

Max has to get his favorite suit dry cleaned, it costs him $45.00 each time.

• Fixed

• Variable

Multiple Choice

Max is taking his date to his favorite ice cream shop after so that they can split a milkshake. His date said that it was a cute and corny thing she always wanted to do one day. The milkshakes are all the same price, regardless of the flavor.

• Fixed

• Variable

Multiple Choice

Max's date just updated him, that she would like to go to Gino's and play mini golf. She is meeting Maz at his house, so Max will need 4 gallons of gas at the current price of gas which is $2.89. It has been this price all week.

• Fixed

• Variable

Multiple Choice

The price of the mini golf games are determined by the course that you choose to play. Is this a fixed or variable expense?

• Fixed

• Variable

Your Turn!

Choose one of the following options and create a list of 4 possible variable expenses and 4 possible fixed expenses that could be budgeted for.

-A school club
-A spa night with friends
-A birthday party