Question

Once expenses have been identified, they can be categorized as either fixed expenses or variable expenses.

For example, your mortgage would be considered a _______ expense, because ______. Conversely, grocery bills would be considered _____, because the actual amount is ______.

Answer 1

Once expenses have been identified, they can be categorized as either fixed expenses or variable expenses.

For example, your mortgage would be considered a __fixed__ expense, because _the total amount does not vary_. Conversely, grocery bills would be considered _variable_, because the actual amount is _varies_.

Step-by-step explanation:

Fixed expenses are fixed in total within a relevant range. The amount remains the same from one period to the next. The element of the fixed expense that changes is the cost per unit and not the total amount. On the other hand, variable expenses vary in total because of their quantities vary but their costs per unit remain fixed.