ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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-2: -Definition of Variable Expense An expense is variable when its total amount changes in proportion to the change in sales, production, or some other activity. In other words, a variable expense increases when an activity increases, and it decreases when the activity decreases.

Detailed explanation-3: -Fixed expenses: These are costs that largely remain constant, such as your monthly rent or mortgage. Variable expenses: These are costs that vary or are unpredictable, such as dining out or car repairs.

Detailed explanation-4: -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-5: -Fixed expenses are paid at regular intervals-often monthly. Some fixed expenses are what are known as “periodic fixed expenses.” These expenses are fixed and regular, but don’t occur monthly-they may occur quarterly or annually instead, for example.