ECONOMICS
BUDGETING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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variable
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fixed
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periodic
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None of the above
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Detailed explanation-1: -Examples of fixed expenses include: Rent or mortgage payments. Car payments. Other loan payments.
Detailed explanation-2: -Examples of fixed costs are rent and lease costs, salaries, utility bills, insurance, and loan repayments. Some kinds of taxes, like business licenses, are also fixed costs.
Detailed explanation-3: -Rent, rates and taxes is an example of direct expenses.
Detailed explanation-4: -In an accrual basis of accounting, if rent is paid in advance, it is considered as an asset, and once the facility is utilised, it is then considered an expense.
Detailed explanation-5: -An example of fixed cost is a rent payment. If a company pays $5, 000 in rent per month, it remains the same even if there is no output for the month. Conversely, a variable cost is dependent on the production output level of goods and services.