variable expenses


Variable Cost

A cost to a person or business that varies over time according to a number of factors. For example, a dental office must buy dental supplies, which usually cost about the same. This is a fixed cost. On the other hand, the dental office must also pay the electric and gas and water bills, which may fluctuate considerably. This is a variable cost.

variable expenses

Property operating expenses that increase and decrease in relatively direct proportion to changes in occupancy. It is important to differentiate between fixed expenses and variable expenses because the fixed expenses must be met every month,no matter what the occupancies.In preparing a pro forma analysis for a new project,one will usually calculate fixed expenses starting with month 1 and continuing unchanged until perhaps another employee must be added to the payroll.Variable expenses, however, are always calculated as dependent on lease-up and tied to each month's occupancy figures if the pro forma is a spreadsheet.