How to Identify Expenses as Mixed, Fixed or Variable

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Business expenses can be fixed, which are expenses like rent that are always the same; variable, which are expenses that change from month to month; or a mixture of fixed and variable. Identify mixed, fixed or variable expenses in a business with help from a business professor in this free video on business expenses.

Part of the Video Series: How to Open a Small Business
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Video Transcript

Hi. My name is John Niemira. I wanted to talk to you today about expenses, whether they're mixed, fixed, or variable expenses. Company expenses can be usually variable or fixed. A mixed expense is the combination of both. A fixed expense in your company may be something like your rent, it may be equipment that you lease or rent. It's an expense that is going to be the same each month throughout the length of the contract. A variable expense is one that changes. We use an example of a phone bill, an electric bill, suppliers bills, those sort of things. They change each and every month depending on how much you buy, how much you use, whether it's electricity bill or phone bill or supplies that you purchase. These can change and that's why they're called variables. The fixed expenses, of course, become your assets, but they are your building expenses, your leases, your equipment expenses, and then when you mix them together they can change so it's an expense that sometimes is the same, sometimes changes. If you need any more information on this subject or any other subject in the business field, my e-mail address is jniemira@gmail.com.

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