Variable costs are expenses that vary in proportion to the volume of goods Inventory Inventory is a current asset account found on the balance sheet, consisting of all raw materials, work-in-progress, and finished goods that a company has accumulated. A variable costing income statement is one in which all variable expenses are deducted from revenue to arrive at a separately-stated contribution margin, from which all fixed expenses are then subtracted to arrive at the net profit or loss for the period.. User: Which of the following would be considered an example of a variable cost? Which of the following is considered a variable cost? the lowest of any form of short-term financing. You can define variable expenses as the costs that change month to month, depending on quantity or usage. This is a fixed cost. Variable Costs – Definition and Examples. A. A decrease in net worth would be the result of A) income greater than expenses for a month. A cost to a person or business that varies over time according to a number of factors. The amount of raw materials and inventory you buy and the costs of shipping and delivery are all variable. excessive and to be avoided if at all possible. 1 Question 15 A. The variable cost to make all of the cakes is $72. If Pierre’s recipe makes 6 dozen cakes (72 cakes), the variable cost per unit would be $1. In other words, with either a high or a low patient census, expenses related to rent, utilities, loan payments, administrative salaries, and salaries of the minimum number of staff to keep a unit open must be paid. The cost of property & casualty insurance. Rent B. Hence when its sales are $10,000 the cost of goods will be $6,000. And it can increase your financial stability at the same time. a. sales commission b. hourly wages c. rent d. materials 2 See answers thegreatandpowe thegreatandpowe The answer is c. Rent abreen609 abreen609 The correct answer is rent. a ) Rent b ) Raw materials c ) interest d ) Insurance The cost of trade credit involving cash discounts as a form of short-term financing is: Answer. Variable Expenses Variable expenses are still necessary costs, but the amount changes every month, often in concert with your usage or choices. Another example of a variable expense is a retailer's cost of goods sold. Variable costs such as commissions, bonuses and utility bills vary based on product production and sales for the period, whereas fixed costs do not tend to fluctuate. Contingent rents (ASC 840-10-25-5) are not currently treated as MLPs; as a result, a contract that has a considerable variable component as well as a fixed amount is not likely to meet the 90% test, and the lease will probably be considered an operating lease in its entirety. B. The logic behind this expensing of fixed manufacturing costs is that the company would incur such costs whether a plant was in production or idle. Both costs are constant when considered on a per-unit basis. Which of the following payments would be considered a variable expense? Clara’s Costumes is a retailer of costumes, primarily purchased for Halloween. a. insurance for employee automobiles Incorrect b. feed for cattle at a feed lot The definition of a variable cost is a cost that changes with changes in volume or activity. One way for a company to save money is … As sales go down, variable costs go down. Variable overhead is the cost of operating a business, which fluctuates with manufacturing activity. As production output increases or decreases, variable overhead moves in tandem. Variable costs change with the amount of products or services you sell. Variable expenses are those that can change based on things like weather, cost, demand, or many other variables. The definition of variable costs can differ, but we like to define them as anything you can buy in a store (for example groceries, gas, or coffee) or expenses that are within your control. New questions in Mathematics. Have you ever considered the difference between fixed and variable expenses? Sometimes these costs remain … Salary paid to the chief financial officer. Fixed expenses remain the same every month. That includes labor costs (direct labor) and raw materials (direct materials). I need to know which of the following expenses are fixed and variable: Indirect materials 2,000 Administrative salaries 35,000 Utilities 21,000 Rent 16,000 Miscellaneous costs 3,000 Insurance 7,000 Advertising expense 120,000 Amortization 2,400 Shipping expense 10,000 Marketing report 2,000 According to me the fixed expenses can be classfied into Manufacturing O.H, Admn expenses, … Variable Overheads; Such Overhead expenses are the ones that vary in direct proportion to the volume of output. Variable selling and administrative costs also must be distinguished from variable manufacturing costs, which often have similar account names. Buying gas for your car each month is a variable expense, as are car repairs and maintenance. B) the variable costs associated with the special order. What is a variable expense? Variable Overhead Examples include Shipping expenses, Advertising Costs, etc. A. rent B. interest payment on a loan C. cost of raw materials D. salary of a permanent, full-time worker Weegy: An example of a variable cost is cost of raw materials. Variable expenses are defined as such because the amount you spend may vary each month. It can help you create a budget that reduces your stress level. Answer to Which of the following would be considered a variable expense ? Rent B. When the sales are $30,000 the cost of goods sold will be $18,000. Which of the following would be considered a variable cost? Variable expenses are tied in to your business's productivity. darkbakshi|Points 706| User: Which of the following business practices, which forced competitors to shut down, was Standard Oil accused of … _____ is considered a variable operating expense of an automobile. This expense is directly related to sales. What Is a Variable Cost? usually greater than the cost of commercial bank credit. C. Total costs for a company are usually composed of which of the following? Variable costs (aka variable expenses) Falling under the category of cost of goods sold (COGS), your total variable cost is the amount of money you spend to produce and sell your products or services. You can decide how much and if you will spend on these items. However, if your business includes manufacturing, the electricity can be considered a variable cost, as it will likely fluctuate with production. Answer and Explanation: Which of the following statements is true regarding fixed and variable costs? D) fixed costs that will not be affected by the order. This is a variable cost. Although variable costs are quite often discretionary expenses, some may be necessities. The more a car is driven, the more often the oil-and-lube must be executed, as well as purchase of new tires, as well as the 30,000 mile servicing, etc. A variable cost is a cost that changes in relation to variations in an activity.In a business, the "activity" is frequently production volume, with sales volume being another likely triggering event. Variable costs are costs that change regularly while fixed costs remain the same all the time. Variable Cost: A variable cost is a cost that varies depending on the level of output. Variable costs are the costs of labor or raw materials because these items change with sales. D. A manager should always reject a special order if A) the special order price is less than the variable costs of the order. Select One: A. A. Raw Materials C. Interest D. Insurance This problem has been solved! Which of the following costs would be considered variable? Variable expenses, such as utility bills, may make it difficult to accurately budget. B. On the other hand, the dental office must also pay the electric and gas and water bills, which may fluctuate considerably. What are Variable Costs? A. fixed and variable costs B. fixed and mixed costs B) there is available excess capacity. The total fixed costs in a unit are those costs that do not change as the volume of patients changes.