ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Your utility bills may also be variable expenses because they may change from month to month. For example, you might spend more on electricity in July than you do in December because of air conditioning. Variable expenses may be harder to shrink than fixed expenses because they can affect your lifestyle.

Detailed explanation-2: -Variable costs are costs that change as the volume changes. Examples of variable costs are raw materials, piece-rate labor, production supplies, commissions, delivery costs, packaging supplies, and credit card fees.

Detailed explanation-3: -Utilities are a variable cost because the amount of money spent may change depending on the amount of electricity and water used during the billable time period.

Detailed explanation-4: -Utilities expense is the cost incurred by using utilities such as electricity, water, waste disposal, heating, and sewage. The expenses are incurred over the course of the reporting period, calculated, and accrued for, or payment is rendered.

Detailed explanation-5: -The amount of Utilities Expense for the sales function is classified as a selling expense and the amount used for administration is classified as an administrative expense. Utilities used in the manufacturing process will be part of the cost of the products manufactured.