Fixed vs Variable Expenses

What are examples of fixed expenses?

• Mortgage or rent, car payment, insurance premiums

• Vacation expenses, dining out, gym membership

• Phone bill, internet bill, electricity bill

• Groceries, entertainment, clothing

Name three common fixed expenses.

• Rent, mortgage, car payment

• Phone bill, internet, gym membership

• Clothing, dining out, travel

• Groceries, utilities, entertainment

Why are fixed expenses called 'fixed'?

• Because they remain constant and do not change regardless of the level of production or sales.

• Because they are dependent on the level of production or sales

• Because they are temporary and only last for a short time

• Because they are flexible and can change easily

What are examples of variable expenses?

• Mortgage

• Groceries, entertainment, dining out, clothing

• Property taxes

• Car insurance

Give three examples of variable expenses.

• Groceries, entertainment, clothing

• Medical expenses, school tuition, taxes

• Utilities, rent, internet

• Mortgage, car payment, insurance

How do variable expenses differ from fixed expenses?

• Fixed expenses are only paid once a year

• Variable expenses are always higher than fixed expenses

• Variable expenses can change from month to month, while fixed expenses remain constant.

• Variable expenses are not affected by changes in income

Which of the following is a fixed expense: rent, groceries, or entertainment?

• groceries

• entertainment

• rent

• car payment

Which of the following is a variable expense: internet bill, mortgage, or car loan?

• mortgage

• electricity bill

• car loan

• internet bill

Explain the concept of fixed expenses in your own words.

• Fixed expenses are one-time payments

• Fixed expenses are only related to groceries

• Fixed expenses are regular, predictable costs that remain the same each month.

• Fixed expenses are costs that change every month

Explain the concept of variable expenses in your own words.

• Variable expenses are costs that can change from month to month.

• Variable expenses are related to long-term investments.

• Variable expenses are costs that remain the same every month.

• Variable expenses are only incurred by businesses, not individuals.