ECONOMICS
BUDGETING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Fixed Expense
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Variable Expense
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Either A or B
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None of the above
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Detailed explanation-1: -Examples of Fixed Expenses Insurance premiums, such as for car insurance and homeowners insurance. Property taxes. Internet and cable bills. Childcare expenses.
Detailed explanation-2: -Examples of fixed costs are rent and lease costs, salaries, utility bills, insurance, and loan repayments.
Detailed explanation-3: -Fixed expenses generally cost the same amount each month (such as rent, mortgage payments, or car payments), while variable expenses change from month to month (dining out, medical expenses, groceries, or anything you buy from a store).
Detailed explanation-4: -So, the insurance premiums are classified as fixed costs because they do not change with the changes in the output produced by the firms.