Question

Expenses, such as depreciation on buildings are also known as variable expenses. t or f?

Answer 1

The statement “Expenses, such as depreciation on buildings are also known as variable expenses.”, is false, due to the fact that depreciation is a fixed cost since throughout its useful life as an asset, it reoccurs in the same amount per period, and thus, depreciation cannot be considered a variable cost. Nevertheless, as with all things, there is an exception. The depreciation will be sustained in a pattern that is more consistent with a variable expense, only if a business recruits a usage-based depreciation methodology.

To add, the corporate expense that alters with the company’s production output is called the variable cost.