Ben and his housemates signed a lease for an apartment for 12 months for $563 per month of which Ben agreed to pay $215 per month. Which of the following statements best gives the reasons that Ben's rent payment is an essential (fixed) expense?

a. It cannot be eliminated in a later budget, in order to save money.

b. Living expenses have a higher priority than any other type of expense.

c. The spender controls the amount of the rent by choice of apartment.

d. It is by contract the same amount every month.

Question

Mohammad

Mathematics

16 May, 07:35

Ben and his housemates signed a lease for an apartment for 12 months for $563 per month of which Ben agreed to pay $215 per month. Which of the following statements best gives the reasons that Ben's rent payment is an essential (fixed) expense?

a. It cannot be eliminated in a later budget, in order to save money.

b. Living expenses have a higher priority than any other type of expense.

c. The spender controls the amount of the rent by choice of apartment.

d. It is by contract the same amount every month.

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Answers (1)

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Imani Michael · Answer 1

d. it is by contract the same amount of money every month

A fixed cost is a periodic or recurring cost of the same amount set by a contact or agreement. It is usually required to be paid without condition - in this case without guarantee of Ben having a source of income or anything else guaranteed but a place to live. In the case of businesses, lease on a space might be a fixed cost that must be paid before any revenue is made.