what is the difference between a fixed expense and a variable expense?
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Fixed cost includes expenses that remain constant for a period of time irrespective of the level of outputs, like rent, salaries, and loan payments, while variable costs are expenses that change directly and proportionally to the changes in business activity level or volume, like direct labor, taxes, and operational ...
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Fixed Income X Variable Income Gains or losses on initial capital; In fixed income the investor does not lose the capital that is applied initially, even if the interest is not a great thing; In variable income, if the interest is negative, the investor may lose part of the money invested initially.
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Variable Costs and Fixed Costs Fixed costs often include rent, buildings, machinery, etc. Variable costs are costs that vary with output. Generally variable costs increase at a constant rate relative to labor and capital. Variable costs may include wages, utilities, materials used in production, etc.
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What is the primary difference between a static budget and a flexible budget? -The static budget contains only fixed costs, while the flexible budget contains only variable costs. -The static budget is prepared for a single level of activity, while a flexible budget is adjusted for different activity levels.
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Add your fixed and variable costs to determine your total cost. As with personal budgets, the formula for calculating a business's total costs is quite simple: Fixed Costs + Variable Costs = Total Cost.
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Fixed expenses, savings expenses, and variable costs are the three categories that make up your budget, and are vitally important when learning to manage your money properly. When you've committed to living on a budget, you must know how to put your plan into action.
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In accounting, variable costs are costs that vary with production volume or business activity. ... Fixed costs include various indirect costs and fixed manufacturing overhead costs. Variable costs include direct labor, direct materials, and variable overhead.
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Loans are typically offered with either a fixed rate or variable rate. A fixed APR means that the interest rate will not change during the life of the loan. A variable APR, on the other hand, indicates that the interest rate may fluctuate during the course of the loan duration.
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In the short run, there are both fixed and variable costs. In the long run, there are no fixed costs. Efficient long run costs are sustained when the combination of outputs that a firm produces results in the desired quantity of the goods at the lowest possible cost. Variable costs change with the output.
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The only difference between absorption costing and variable costing is the treatment of fixed manufacturing overhead (FMOH). Under absorption costing, FMOH is allocated to units produced, so that there is a little bit of FMOH included in the cost of every unit of inventory.
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Under the variable costing method, fixed manufacturing overhead costs are expensed during the period they are incurred. In contrast, the full costing approach recognizes fixed manufacturing overhead costs as an expense when goods or services are sold.
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Variable costs may include labor, commissions, and raw materials. Fixed costs remain the same regardless of production output. Fixed costs may include lease and rental payments, insurance, and interest payments.
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Fixed-rate financing means the interest rate on your loan does not change over the life of your loan. ... With a variable-rate loan, the interest rate on the loan changes as the index rate changes, meaning that it could go up or down. Because your interest rate can go up, your monthly payment can also go up.
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In accounting, fixed costs refer to costs that do not vary with production volume. They remain relatively constant regardless of the company's level of production or business activity. ... A fixed cost does not necessarily remain perfectly constant. It can vary.
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A fixed cost is a cost that does not change with an increase or decrease in the amount of goods or services produced or sold. Fixed costs are expenses that have to be paid by a company, independent of any specific business activities.
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A fixed-rate student loan offers a predictable monthly payment, with an interest rate that doesn't change over the life of the loan. A variable-rate student loan, on the other hand, has an interest rate that can fluctuate, increasing or decreasing compared with a similar fixed-rate loan, depending on market conditions.
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Whats the difference between "fixed" and "flexible" expenses? Fixed: expenses that are the same every month. EX: car payment. Flexible: expenses that can change from month to month.