What is a variable expense? Variable expenses are expenses that vary as the amount of the product or service a company produces varies. Variable expenses are the total amount of charges paid to the firm for products or services purchased. They are also known as primary costs.
Variable expenses are the total amount of charges paid to the firm for products or services purchased during a period of time, rather than a set amount. Examples of fixed expenses are the price of a loaf of bread, utility bills such as water and electric, interest, and mortgage interest. Examples of variable expenses are gasoline, what is a variable expense, groceries, entertainment, meals, and so on. When comparing budgets, it’s important to remember that certain activities may not have an impact on what is a variable expense.
Let’s compare what is a variable expense with what is a fixed expense. A fixed expense is something that you pay regardless of what is being purchased. For example, your car payments, mortgage payment, credit card payments, or food expenses are fixed expenses. A variable expense is one that is affected by the purchases you make.
In your monthly budgeting, what is a variable expense will affect what is a variable expense. Suppose your primary cost for the month is forty dollars. You decide to cook a new meal for dinner. The total cost of your meal is eighty dollars. If you had to pay for gas, what is a variable expense would be the amount of money you spend to drive to and from the grocery store. You cannot expect to eat the same amount of the expensive item as you did the previous week.
The best way to keep your budgeting simple is to create a budgeting spreadsheet. To make this easier, you can use a software package like Budget Wizard, which has a pre-made budgeting spreadsheet and worksheet. To make things easier, think of your expenses as transactions in a cash register. Your goal is to monitor your transactions to see what is a variable expense and what is a fixed expense. If you were purchasing groceries, what is a variable expense would be what you spend for groceries. Now, if you need to buy fuel for your car, what is a fixed expense is the amount of dollars you pay for gasoline every month.
If you had to pay for gas every month, what is a variable expense would be your car payments. The same thing could be said for your mortgage payment. Your mortgage payments could also be classified as fixed expenses or variable expenses. In other words, what is a fixed expense is what you pay every month and what is a variable expense is what is left over after paying your bills.
To calculate your total available income, add up all your fixed expenses including what is a variable expense on your car payments and your mortgage. Your total available income is equal to your salary times your estimated tax rate times 12.5. The remaining number is your taxable income. This number will include all the variable expenses that are allowed on your taxes, such as your child’s sports activities, your car payments and so on.
Once you have completed your budgeting work, it is time to review it. What you are looking for here is what is a constant, which is what you can count on each month. This means what is a variable expense and what is a fixed expense should change. The first item you need to review would be your car payments, as these must be paid monthly. Next, review your budgeting spreadsheet for your groceries and see what is a fixed expense, and what is a variable expense that you can change to make your grocery bill a little lower each month.