Which of the following is a variable expense?
They change over a period of time. Variable expenses are those expenses that are likely to be affected in proportion to the activities of the business. Expenses like production wages, raw materials, sales commission, shipping costs etc. are examples of variable expense.
What are the different types of expenses?
When it comes to creating a budget, there are two broad types of expenses: Fixed expenses, like rent or mortgage payments, and variable expenses, like food and travel. What are variable expenses, exactly? Essentially, these expenses are costs or spending categories that change over time .
Are variable expenses discretionary?
Variable expenses can be discretionary — but they can also be necessary. For instance, your heating bill is a variable expense (it’s likely higher in the winter than the summer), but it wouldn’t be considered discretionary. On the other hand, travel is a variable expense — but in many cases, travel is discretionary.