Question

Your expenses exceed your income. You should cut back your

a. fixed costs.
b. variable costs.
c. opportunity costs.
d. budget.
i think its either b or d. Please help me! Thanks! :),

Answer 1

Your expenses exceed your income. You should cut back your variable costs. Your fixed costs are unable to be changed as this will include rent or mortgage, monthly bills and other items that are needed monthly to survive. Your opportunity costs are what happens when you give up one thing to receive one more unit of something else. Your budget refers to what you made each month that is spendable money. Your variable costs are what you can cut back on because they are items that vary each month and not needed to survive.

Answer 2

If your expenses exceeded your income, you should reduce your variable cost. The variable cost is the controllable cost because it depends on the level of the output you are expected to have. These are costs that can be cut off by reducing the output level.