Which is a variable expense?

Which is a variable expense?

• A. Rent
• B. Grocery bill that changes
• C. Mortgage payment
• D. Car loan payment

Answer: (C)

Variable expenses are costs that can go up or down from month to month depending on usage or choices. Fixed expenses stay the same each period. In these options, a grocery bill that changes is the one that varies month to month, because how much you spend on groceries can vary with what you buy, prices, and sales. Rent, mortgage payments, and car loan payments are usually the same amount every month, so they’re fixed expenses. This distinction helps you plan a budget: you can adjust the variable expenses when you need to save more, while fixed expenses are the baseline you must pay.

Variable expenses are costs that can go up or down from month to month depending on usage or choices. Fixed expenses stay the same each period. In these options, a grocery bill that changes is the one that varies month to month, because how much you spend on groceries can vary with what you buy, prices, and sales. Rent, mortgage payments, and car loan payments are usually the same amount every month, so they’re fixed expenses. This distinction helps you plan a budget: you can adjust the variable expenses when you need to save more, while fixed expenses are the baseline you must pay.