Question

Complete these sentences to describe categories of budget expenditure items.

A fixed expense is one for which the amount is
, and it should be considered
other expenses.

A variable expense is one for which the amount is
, and it should be considered
fixed expenses.

Discretionary spending is the most
budget item and the easiest to change.

Answer 1

A fixed expense is one for which the amount is the same each period, and it should be considered a priority over other expenses.

A variable expense is one for which the amount changes from period to period, and it should be considered after fixed expenses.

Discretionary spending is the most flexible (optional) budget item and the easiest to change.