What is an example of a variable expense?

What is an example of a variable expense?

Typical household variable expenses might include: 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.

Is maintenance a variable cost?

All costs like repairs and maintenance, indirect labor, etc., are variable overhead costs. The overheads costs that are constant when totaled but variable in nature when calculated per unit are known as fixed overheads. Fixed costs tend to decrease per unit with the increase in the production output.

Is utility a variable cost?

Variable costs are costs that vary with output. Generally variable costs increase at a constant rate relative to labor and capital. Variable costs may include wages, utilities, materials used in production, etc. These are simply costs that are part fixed and part variable.

Which two expenses are considered variable expenses?

Companies incur two types of production costs: variable costs and fixed costs. 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.

Why variable costs may be separated from fixed costs?

Being able to separate your fixed costs from your variable costs allows you to calculate a very useful figure; your business’s break-even point. If you sell goods, or if you sell your services priced as units, the break-even point is how many units you need to sell in order to cover all your costs.

Which is not a fixed cost?

Fixed costs are those which are fixed for the production period. Wages paid to workers however can vary as the number of workers increase or decrease. Hence it is not considered as a fixed cost.

Why are salaries a fixed cost?

Fixed costs remain the same, whether production increases or decreases. Wages paid to workers for their regular hours are a fixed cost. If a worker works for more than six hours per day, the extra amount paid to the worker is a variable cost because the worker is free to determine how many extra hours to spend working.

Is rent a fixed or variable cost?

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 the variable cost formula?

Total Variable Cost = Total Quantity of Output x Variable Cost Per Unit of Output.

Is supervisor salary a variable cost?

Therefore, the electricity cost is a direct production department cost that is variable since it changes with the volume of products manufactured. On the other hand the salaries of the production department supervisors are a direct production department cost that is fixed.

What is variable amount salary?

Variable pay, also known as performance pay, is used to recognise and reward employee contribution above and beyond their normal job requirements, towards company productivity, profitability, quality and the like.

What is variable pay in CTC?

For example if your CTC was Rupees 10 lakhs, it could happen that 4 lakhs of the CTC would be FIXED and the remaining 6 lakhs would be variable. The part of the variable component ultimately paid to you could go down or up depending on your performance or some parameter that supposedly would be under your control.

How is CTC written?

CTC means cost to company. It is the total money that a particular company spends on you or it is your gross salary. Current CTC:- it’s ​the amount of money that your present company gives you. Example:- CTC of ₹500000 p.a. mean this is the whole amount that your present company is giving you per year.

What is your current CTC Fixed Variable?

The CTC typically includes fixed heads such as basic pay (which ranges around 40-50% of the CTC), home rent allowance (which ranges around 40-50% of the basic salary), employees’ provident fund (EPF), gratuity, other reimbursements such as car fuel and mobile bills etc., and variable components such as annual bonus and …