Depreciation is one common fixed cost that is recorded as an indirect expense. 1 1 Expense Ratio: The expense ratio is a measure of what it costs an investment company to operate a mutual fund . Which of the following account records would have the most current balance? c. Lease charge. Level: Medium LO: 5 Ans: D. 53. If a company requires a profit of $30,000 (instead of breaking even), the $30,000 should be combined with the fixed expenses in order to compute the point at which the company will earn $30,000. Depreciation. The term “fixed expenses” can be used in reference to either personal or business finances. A fixed prepayment per person to the healthcare provider for an agreed upon array of services is which of the following? Sales = Contribution margin (Rs.) Definition of Static Budget. Depreciation is used to gradually charge the book value of a fixed asset to expense. Fixed manufacturing overhead totals $36,000 and fixed selling and administration expenses total $40,000. Construction cost of the item, which can include labor and employee benefits Which of the following is usually the largest fixed expense for a new vehicle - Answered by a verified Tutor We use cookies to give you the best possible experience on our website. If you lose your job or aggressively want to start saving, you could devote a few hours to culling your fixed expenses. The costs to assign to a fixed asset are its purchase cost and any costs incurred to bring the asset to the location and condition needed for it to operate in the manner intended by management. Total mixed cost = (Variable cost per unit x Number of units) + Total fixed cost a. a. User: Which of the following is an example of a fixed expense?A. Finally, Amazon has charged a provision for income taxes and accounted for equity method investment activity. |Score 1|Ishm|Points 21335| User: The factor that has the greatest impact on your credit score is A. total amount owed. Outside the relevant range, total fixed costs may change and/or variable costs per unit may change. For example, a company may have unexpected and unpredictable expenses unrelated to production, such as warehouse costs and the like that are fixed only over the time period of the lease. The amounts may vary slightly, which may be the case with utilities, but you know they are due on a regular basis. Account balance from ATM statement B. A master budget consists of a. an interrelated long-term plan and operating budgets. Choosing between a brand-new phone or an inexpensive or refurbished phone is a variable expense. Property taxes. Clothing C. Entertainment D. Food Fixed expenses are expenses which remain static, not fluctuating over time. Fixed expenses totaled $54,000, variable expenses were $14.00 per unit, and the company reported a profit of $9,000 for the year. Question 1. Which of the following is the right formula for calculating total mixed cost? Fixed and Variable Expenses Management budgets fixed costs, such as advertising, and keeps control over the expense. B. work in process inventory. Which of the following is a good way to improve your credit score? Non-operating expenses comprise interest expense (and income), and other expenses (income). 2) Which of the following is a fixed cost with respect to units produced in a factory? A. They are expenses that will have to be paid by the company even though there are any changes in business activities. If it produces 10,000 mugs a month, the fixed cost of the lease goes down, to the tune of … Fixed costs are not permanently fixed; they will change over time, but are fixed, by contractual obligation, in relation to the quantity of production for the relevant period. Any expense which is varying with levels of production is a variable expense. By continuing to use this site you consent to the use of cookies on your device as … 52. B. number of credit inquiries.C. More specifically, assign the following costs to a fixed asset: Purchase price of the item and related taxes. Companies know how much they're planning to spend on advertising over a particular period and can calculate the percentage of that expense as part of their unit costs. The following are examples of both business and personal fixed expenses. a. b. financial budgets and a long-term plan. D. All of these. For example, you may need a cell phone for work or health reasons. B. fixed costs in total remain the same. Chapter 19: Cost-Volume-Profit Analysis 19.1-11 Which of the following is NOT a fixed cost? Office salaries c. Property taxes d. Depreciation 74. Operating expenses consist of the cost of sales, fulfillment, marketing, technology and content, general and administrative, and others. Finance Software for Variable Expenses . If a company is operating at the break-even point: a Its contribution margin will be equal to its variable expenses. types of credit in use. a. Assuming a beginning inventory of zero, production of 4,000 units and sales of 3,600 units, the dollar value of the ending inventory under variable costing would be: The Benefits of Saving Money on Fixed Expenses . As such, it may spread the fixed cost of the lease at $10 per mug. a) A, B, C b) B, C, D c) A, C, D d) A, B, D View Answer / Hide Answer For example, with more production, expenses on raw materials will also increase. They remain constant for a … The calculations for sales commissions and delivery expense, followed by the selling expenses budget, are shown in the following … b Its margin of safety will be equal to zero. The break-even point for Mason Company is: A) 10,500 units. Which of the following is an example of a fixed expense? A. This is in contrast with variable expenses, which change. D. Pay your bills on time. Within the relevant range, as the number of units produced increases: A. the variable cost per unit remains the same. The following are the general methods of depreciation available for use: Straight line. A. The definition of fixed expenses is “any expense that does not change from period to period," such as mortgage or rent payments, utility bills, and loan payments. On the income statement, which of the following would be classified as a variable cost? + Fixed expenses + Profits b. C. Move debt around frequently. D. payment history. d. Direct materials. These costs, such as depreciation expense, property tax expense and insurance expense, cannot be changed during short periods of time and are only A) monthly rent payment for the building B) electricity expenses C) utilities cost of the building D) direct material costs C. finished goods inventory. Entertainment C. Rent D. Clothing B. 6. Fixed expense are those expenses that will remain same despite any change in the sales amount, production or some other activity. Promotion Expense b. Which of the following are assumptions for break-even analysis? A) Property taxes B) Salary of plant manager C) Direct materials cost D) Straight-line depreciation Answer: C Difficulty: 1 19.1-12 A 15% increase in production volume will result in a: A) 15% increase in the variable cost per unit. Rent B. Based on budgeted Sales b. Committed fixed costs relate to costs that the company will incur over the long-term. Which of the following is not a fixed cost? My own account register C. My monthly bank statement: B. The company also has fixed sales salaries of $50,000. Inventory c. Carry Expense d. Depreciation Expense C) Behavior of different costs is linear D) Selling per price unit remains constant. Apply for several credit cards. This includes most types of employee salary with the exception of labor that is scaled up and down with business volumes. Food B. B) 15% increase in total mixed costs. Rent B. The major lesson here is that in spite of its name, “fixed” expenses are not necessarily set in stone. D. the fixed costs will remain the same, but the variable cost per unit may change. A) Elements of cost cannot be divided in different groups. A static budget is a budget in which the amounts will not change even with significant changes in volume.. b. Using budget profit c. Using profit & Contribution ratio d. All of the given options 12. Some expenses can contain discretionary, variable, and fixed categories. 10. Which of the following would not appear as a fixed expense on the Selling and Administrative Expense Budget? C. variable costs increase in total. 1 17. Some personal finance software lets you set a different amount from month to month for expenses that vary. Which of the following is an example of a fixed expense? 3. Don't allow balances to get to zero. Clothing C. Entertainment D. Food Weegy: Rent is an example of a fixed expense. What is a static budget? There are several methods of depreciation, which can result in differing charges to expense in any given reporting period. C.the fixed costs and the variable cost per unit will not change. D. both raw materials inventory and work in process inventory. Mason Company’s selling price was $20.00 per unit. A. d. Fixed costs 11. B) 4,500 units. Percentage of Margin of Safety can be calculated in which one of the following ways? Business In the context of business, a fixed expense is anything that doesn't change with production volumes or strategy. The fixed asset account contains the original acquisition cost of a number of fixed assets, while the contra account (accumulated depreciation) contains the sum total of all the depreciation expense that has been charged against those assets over time. Fixed Expenses – Definition, Examples and Lists. In contrast to a static budget, a company's sales department might have a flexible budget.In the flexible budget, the sales commissions expense budget would be stated as a percentage of sales. C) 8,500 units. Which of the following represents a CVP equation? a. Freight-out b. Fixed costs are also allocated in the indirect expense section of the income statement which leads to operating profit. D) 9,000 units. B) Fixed cost remains certain from zero production to full capacity. Fixed expenses divided by the contribution margin per unit is the break-even point in UNITS (not the break-even point in dollars). Sales commissions are 4% of sales dollars, and delivery expense, also called freight out by some companies, is $0.10 per unit sold. A. The relevant range, as the number of units produced increases: the. 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