What is an example of a flexible expense?

What is an example of a flexible expense?

Flexible expenses are any non-essential cost that can be changed, reduced, or eliminated to help balance your budget. Flexible expense examples include groceries, dining out, entertainment, and even utilities.

What is a common flexible expense?

Electricity. A common flexible expense associated with apartment renting. Security. A deposite refers to money held to cover possible damage in an apartment.

What is flexible expenditure?

Flexible expenditures, or discretionary costs, include any cost that business can exercise significant control over and alter based on profit or loss without jeopardizing the short-term operations of the business.

What is in a flexible budget?

A flexible budget adjusts to changes in actual revenue levels. Actual revenues or other activity measures are entered into the flexible budget once an accounting period has been completed, and it generates a budget that is specific to the inputs. The budget is then compared to actual expenses for control purposes.

Is a car payment a flexible 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. That’s because fixed expenses tend to take up the biggest percentage of your budget.

What is an example of a discretionary expense?

A discretionary expense is a cost that a business or household can survive without, if necessary. Discretionary expenses are often defined as nonessential spending. Meals at restaurants and entertainment costs are examples of discretionary expenses.

Is a security deposit a flexible expense?

A common long-term goal may involve the parents of a newborn child saving for college. Rent is considered a fixed expense. Flexible expenses stay relatively the same each month. A security deposit covers the rent for the first month when moving into an apartment.

What were the fixed expenses flexible expenses?

In their most basic sense, fixed expenses do not change over time and flexible expenses do. In most individuals’ budgets, monthly mortgage or rent payments are fixed. Flexible expenses may change each month or only occur during certain times of the year.

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).

What is mean by flexible budget in management accounting?

Definition: A flexible budget, also called a variable budget, is financial plan of estimated revenues and expenses based on the current actual amount of output. Management often uses flexible budgets before a period to predict both a best case and worse case scenario for the upcoming accounting period.

Who uses flexible budgets?

A flexible budget works for people who work on commission or who have expenses that vary widely from month to month. The important aspect of using a flexible budget is to spend equal to or less than the income each month.

How do you calculate flexible expenses?

To compute the value of the flexible budget, multiply the variable cost per unit by the actual production volume. Here, the figure indicates that the variable costs of producing 125,000 should total $162,500 (125,000 units x $1.30).

What expenses does a flexible spending account cover?

Flexible Spending Accounts (FSAs) cover massages for certain medical treatments. These treatments must be approved and prescribed by a physician. The Internal Revenue Service (IRS) has ruled that massage therapy for the sole purpose of tension and stress relief does not qualify as an eligible expense.

What does flexible expenses mean?

Definition: Flexible Expense. Flexible expenses are those expenses that can be adjusted or are flexible that can be changed according to the conditions. Generally expense on luxurious goods and on entertainment can be considered as flexible expense which can be varied according to the financial conditions.

What is an eligible Flexible Spending Account (FSA) expense?

What is an eligible flexible spending account (FSA) expense? An eligible expense is any healthcare or dependent daycare expense approved by the IRS for reimbursement through the plan. These eligible expenses are often the same expenses allowed for income tax return deductions.

What is the meaning of flexible spending?

A flexible or flex spending account is a short-term savings account where an employee can set aside money each month, pre-tax. They can then use those pre-tax dollars for approved expenses in that year, such as medical co-pays, in-home health care for a family member, or child care expenses.