An expense that is constant each month is called a fixed expense.
Further Explanation:
Expenses:
The expenses refer to the outflow of the funds from the business. The business has to spend funds for the creation or purchase of the goods or services in order to process them and sell them to earn the profit. The expenses are operating in nature and generally incurred on a regular basis. Majorly expenses are divided into two categories: 1) Fixed expenses, 2) Variable expenses.
Expenses with a constant rate in each month:
The expenses that remain unchanged in every month are known as the fixed cost. The fixed cost is the operating cost that does not change with the change in the output of the business. It remains the same for all levels of output. The rent and electricity bill is an example of a fixed cost. The rent of a building remains the same for every month provided that there is no change in the rent agreement. The rent is not affected by the change in the production of the goods. It will be the same at the lowest level of production or the highest level of production.
Thus, an expense that is constant each month is called a fixed expense.
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Answer Details:
Grade: Senior school
Chapter: Types of Cost
Subject: Cost accounting
Keywords: expense, constant, each, month, called, expense, fixed, no change, the outflow of funds.
Answer:
FIXED
Explanation:
An expense that is constant each month is called a (fixed) expense.
