Question

Disuss the difference between fixed expenses and variable expenses as they relate to a budget?

Answer 1

The difference between fixed expenses and variable expenses is that fixed expenses do not change, regardless of how many items are produced. Variable expenses change based on the number of items produced.

An example of a fixed expense is the rent. The rent is always the same amount, regardless of production.

Materials would be a variable expense. You need enough material to make each item, so the more items you produce, the more material you need.