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Fixed & Variable Costs Consumer Math 2012-2013 1

Fixed & Variable Costs Consumer Math 2012-2013 1

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Page 1: Fixed & Variable Costs Consumer Math 2012-2013 1

1

Fixed & Variable Costs

Consumer Math 2012-2013

Page 2: Fixed & Variable Costs Consumer Math 2012-2013 1

2

Overview

• Needs vs. Wants• Fixed Costs– Examples

• Variable Costs– Examples

• Calculating Total Fixed Costs• Calculating Total Variable Costs• Calculating Total Monthly Bills

Page 3: Fixed & Variable Costs Consumer Math 2012-2013 1

Needs vs. Wants

3

Needs• Food• Clothing• Rent• Car• Phone• Computer

Wants• TV• Phone• Jewelry• Entertainment

Page 4: Fixed & Variable Costs Consumer Math 2012-2013 1

4

Fixed Costs

• Expenses that stay the same each week or month1. Rent2. Insurance3. Dues4. Internet/Cable5. Loan

Page 5: Fixed & Variable Costs Consumer Math 2012-2013 1

5

Discretionary/Variable Costs

• Expenses that change each week or month

1. Gifts2. Recreation3. Clothing4. Groceries5. Phone6. Utilities

7. Haircut8. Food/Snacks9. Parties10.Dating

• Which variable expenses may not occur every month?

Page 6: Fixed & Variable Costs Consumer Math 2012-2013 1

6

Expenses

• What are two fixed expenses that your family has each month?

• What are two variable expenses that your family has each month?

Page 7: Fixed & Variable Costs Consumer Math 2012-2013 1

7

ExampleFixed Expenses

Cost/Month

Rent $1,250

Car Insurance

$200

Car Payment $210

Triple Play $100

School Loan $75

iPhone $100

Total: $1,935

Variable Expenses

Cost/Month

Food $600

Clothing $100

Haircut $50

Dates $200

Birthdays $100

Credit Card $800

Gas $180

Total: $2,030

Revenue Net Pay

Job 1 $2,700

Job 2 $500

Total: $3,200


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