Which of the following is a variable cost in an insurance company? Variable expenses, such as utility bills, may make it difficult to accurately budget. Variable expenses are tied in to your business's productivity. 12. You can decide how much and if you will spend on these items. Raw Materials C. Interest D. Insurance This problem has been solved! B) there is available excess capacity. A) Rent B) An installment loan payment C) A mortgage payment D) A monthly parking fee E) A telephone bill Answer: E Difficulty: Med LO: 3 Page: 79 52. For instance, if a company purchases a product for $30 and then sells it for $50, its cost of goods sold will be a constant rate of 60%. When the sales are $30,000 the cost of goods sold will be $18,000. D. Wages paid to customer service representatives. Clara’s Costumes is a retailer of costumes, primarily purchased for Halloween. the lowest of any form of short-term financing. Variable expenses are defined as such because the amount you spend may vary each month. Rent B. Fixed expenses remain the same every month. Knowing fixed and variable expenses in your budget is important. D. A manager should always reject a special order if A) the special order price is less than the variable costs of the order. _____ is considered a variable operating expense of an automobile. 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. Grocery shopping is also a variable expense. One way for a company to save money is … A decrease in net worth would be the result of A) income greater than expenses for a month. This is a variable cost. Which of the following costs would be considered variable? 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. Have you ever considered the difference between fixed and variable expenses? However, if your business includes manufacturing, the electricity can be considered a variable cost, as it will likely fluctuate with production. What are Variable Costs? Thus, the materials used as the components in a product are considered variable costs, because they vary directly with the number of units of product manufactured. Raw Materials C. Interest D. Insurance Select One: A. As sales go down, variable costs go down. Which of the following would be considered a variable cost? For example, a dental office must buy dental supplies, which usually cost about the same. Buying gas for your car each month is a variable expense, as are car repairs and maintenance. Variable overhead is the cost of operating a business, which fluctuates with manufacturing activity. Variable Overhead Examples include Shipping expenses, Advertising Costs, etc. The more in demand your products are, the more the costs go up. D) fixed costs that will not be affected by the order. 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. A. fixed and variable costs B. fixed and mixed costs excessive and to be avoided if at all possible. Variable costs change with the amount of products or services you sell. This is a fixed cost. 1  Another example of a variable expense is a retailer's cost of goods sold. New questions in Mathematics. 35 times. Which of the following is considered a variable cost? You can define variable expenses as the costs that change month to month, depending on quantity or usage. Answer to Which of the following would be considered a variable expense ? A. Both costs are constant when considered on a per-unit basis. 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. 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 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. employee salaries B. rent expense C. materials purchases D. heating bill E. all of the above. A variable cost is a corporate expense that changes in proportion to production output. Variable costing (also known as direct costing) treats all fixed manufacturing costs as period costs to be charged to expense in the period received.Under variable costing, companies treat only variable manufacturing costs as product costs. Which of the following expenses is not a variable cost? The second kind of costs to consider are your variable expenses. 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. Variable expenses are those that can change based on things like weather, cost, demand, or many other variables. C. Rent on the production and office facilities. It can help you create a budget that reduces your stress level. 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. C. Total costs for a company are usually composed of which of the following? On the other hand, the dental office must also pay the electric and gas and water bills, which may fluctuate considerably. Hence when its sales are $10,000 the cost of goods will be $6,000. What Is a Variable Cost? Although variable costs are quite often discretionary expenses, some may be necessities. 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, … When classified according to traceability to cost objective, the cost of raw materials is considered a: COST CONCEPTS AND CLASSIFICATIONS 1 DRAFT. Pierre’s variable cost just to bake cakes might look like this. Variable Expenses Variable expenses are still necessary costs, but the amount changes every month, often in concert with your usage or choices. The cost of property & casualty insurance. 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. Variable Costs – Definition and Examples. University. For example, shipping costs, costs for raw materials, or for employees who are making and shipping products or providing services are usually variable. 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. If Pierre’s recipe makes 6 dozen cakes (72 cakes), the variable cost per unit would be $1. Question 15 A typical household has normal monthly expenses like water, electricity, mortgage, credit card, or other items. Answer and Explanation: Salary paid to the chief financial officer. Variable cost/total quantity of output = x variable cost per unit of output Variable cost per unit = = $72/72 = $1. usually greater than the cost of factoring receivables. The amount of raw materials and inventory you buy and the costs of shipping and delivery are all variable. Variable costs are costs that change regularly while fixed costs remain the same all the time. Variable Overheads; Such Overhead expenses are the ones that vary in direct proportion to the volume of output. Variable Cost: A variable cost is a cost that varies depending on the level of output. C) the effect of the order on regular sales. 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. Select One: A. Variable costs are the costs of labor or raw materials because these items change with sales. a ) Rent b ) Raw materials c ) interest d ) Insurance Which of the following payments would be considered a variable expense? 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. A. The total fixed costs in a unit are those costs that do not change as the volume of patients changes. darkbakshi|Points 706| User: Which of the following business practices, which forced competitors to shut down, was Standard Oil accused of … This expense is directly related to sales. A cost to a person or business that varies over time according to a number of factors. Which of the following statements is true regarding fixed and variable costs? Question: Which Of The Following Would Be Considered A Variable Expense? These overhead expenses are directly affected by business activity. Better money management helps create the financial peace we all desire. What is a variable expense? Maintenance ...This is definitely a variable operating expense. 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.. That includes labor costs (direct labor) and raw materials (direct materials). B) the variable costs associated with the special order. Variable costs are unfixed, discretionary costs that include gas, clothing, entertainment, pet supplies and dining out at restaurants. B. Rent B. B. As production output increases or decreases, variable overhead moves in tandem. Variable selling and administrative costs also must be distinguished from variable manufacturing costs, which often have similar account names. The cost of trade credit involving cash discounts as a form of short-term financing is: Answer. usually greater than the cost of commercial bank credit. Sometimes these costs remain … Fixed costs include rent, utilities, payments on loans, depreciation and advertising. The variable cost to make all of the cakes is $72. User: Which of the following would be considered an example of a variable cost? 2  As sales go up, so do variable costs. And it can increase your financial stability at the same time. Variable costs are directly related to sales volume. A. The key is that it must change as volume changes. Saving for retirement, emergencies, and other financial goals could be considered a fixed expense to ensure you're working towards building wealth and preparing for the future. 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