Which Expense Is Considered A Fixed Discretionary Expense?

Which budget items are examples of a fixed expense?

Here is a list of categories to include in your fixed expenses:Mortgage(s)Rent.Property taxes (if paying monthly)Strata fee / condo fee.House / tenant insurance.Utility bills (cable, cell, electricity, water, etc.)Lease / car loan payment.Vehicle insurance (if paying monthly)More items….

What is an example of a discretionary expense?

Discretionary expenses are often defined as nonessential spending or, in other words, wants rather than needs. This means a business or household is still able to run even if all discretionary consumer spending stops. Meals at restaurants and entertainment costs are examples of discretionary expenses.

Which expense is considered a fixed expense?

Typical fixed expenses include car payments, mortgage or rent payments, insurance premiums and real estate taxes. Typically, these expenses can’t be easily changed. On the plus side, they’re easy to budget for because they generally stay the same and are paid on a regular basis.

What are the 4 types of expenses?

You might think expenses are expenses. If the money’s going out, it’s an expense. But here at Fiscal Fitness, we like to think of your expenses in four distinct ways: fixed, recurring, non-recurring, and whammies (the worst kind of expense, by far).

Is repair and maintenance a discretionary expense?

A discretionary cost is a cost or capital expenditure that can be curtailed or even eliminated in the short term without having an immediate impact on the short-term profitability of a business. … Examples of discretionary costs are: Advertising. Building maintenance.

Which example is a fixed expense?

Fixed Expenses Definition. Fixed expenses are those expenses that stay the same regardless of your sales or business activity and can have a significant impact on your cash flow and budget. Expenses like rent or mortgage, insurance, salaries, and some utilities fall into the category of fixed expenses.

What is a fixed discretionary expense?

A discretionary fixed cost is an expenditure for a period-specific cost or a fixed asset, which can be eliminated or reduced without having an immediate impact on the reported profitability of a business. … The following can be considered discretionary fixed costs: Advertising campaigns.

Is an example of a discretionary fixed cost expense?

Examples of discretionary fixed costs include advertising, research, public relations, management development programs, and internships for students. Discretionary fixed costs can be cut for short periods of time with minimal damage to the long-run goals of the organization.

Is Internet a fixed expense?

Some examples of fixed costs include: Rent. Telephone and internet costs.

What is an example of variable expense?

Typical household variable expenses might include: The cost of household maintenance such as painting or yard care. General expenses such as clothing, groceries, and car maintenance. Resource expenses such as fuel, electricity, gas, and water.

Is clothing a fixed expense?

You could also switch to a cheaper car or health insurance plan or pick an alternative homeowners or renters insurance plan to reduce your fixed expenses. What Are Variable Costs? Variable costs are unfixed, discretionary costs that include gas, clothing, entertainment, pet supplies and dining out at restaurants.

Are groceries considered a fixed expense?

Fixed expenses are your weekly, monthly, or annual bills that don’t fluctuate. … These include things like mortgage or rent payments, car payments, insurance premiums, utility bills, and the average amount you spend on groceries.

What is the difference between fixed and discretionary expenses?

Still, fixed costs are tough to reduce in the short term. By contrast, discretionary expenses—like vacations, entertainment and eating out—can be quickly eliminated if the need arises. That need might arise if you find yourself out of work or you suddenly need to pay for, say, a major home or car repair.

What are mixed costs?

Mixed costs are costs that contain a portion of both fixed and variable costs. Common examples include utilities and even your cell phone!

What is an example of a non discretionary variable expense?

Nondiscretionary expenses are things you must pay for or buy, including the following: Food. Rent or mortgage. Car payments.

Is an electricity bill a fixed expense?

Some utilities, such as electricity, may increase when production goes up. However, utilities are generally considered fixed costs, since the company must pay a minimum amount regardless of its output.

Is Depreciation a discretionary fixed cost?

Examples Examples of committed fixed costs include depreciation of machinery, insurance of premises and machinery, rental of premises, maintenance costs etc. Examples of discretionary fixed costs include advertising costs, public relations expenses, employee training and development costs etc.

What is committed and discretionary fixed costs?

Discretionary vs Committed Fixed Costs Discretionary fixed costs are referred to as period specific costs that can be eliminated or reduced without having a direct impact on profitability. Committed fixed costs are costs that a business has already made or obliged to make in the future; thus, cannot be recovered.