Question

Why might variable expenses change a great deal at different times of year?

Heating and cooling costs might vary considerably.
Income taxes and withholdings may increase or decrease.
Car loan payments become higher in certain seasons.
Discretionary spending may rise when fixed expenses rise.

Answer 1

Correct answer: Heating and cooling costs might vary considerably.

Brief explanations:
- Heating and cooling are classic seasonal variable expenses (higher in winter/summer).
- Income taxes/withholdings are generally fixed by payroll rules or tax changes, not seasonal variable expenses.
- Car loan payments are usually fixed monthly amounts and don’t change by season.
- Discretionary spending may fluctuate for many reasons, but it typically falls when fixed expenses rise (not rises); it’s not a reliable explanation for seasonal swings in variable expenses.