Question

What is most likely the reason variable expenses should be planned after fixed expenses? Fixed expenses are deducted from gross income, and variable expenses come from net income. Variable expenses are a necessary part of fixed expenses but can only be calculated after fixed expenses. Variable expenses are almost always higher than fixed expenses and need a greater budget. Fixed expenses are required and constant, but variable expenses are more flexible.

Answer 1

Answer:

The correct answer is Fixed expenses are required and constant, but variable expenses are more flexible.

Explanation:

When a business starts up, one of the most important things to consider are fixed costs and variable costs.

Variable costs, as the name implies, are those that change according to what the company produces.

While the fixed costs (as well as its name indicates) remain the same whether the company produces, or not.

In simple words:

• Variable costs: Associated with the production of the company.

• Fixed costs: They are not affected by the amount of production of the company.