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Why are sales commissions a variable cost?
Sales commission is a variable cost because the amount of the account is subject to variation. Think about it: A used car salesman is paid a commission say of $500 for every car he sells for the month of October. If he sells only 2 cars, then the sales commission is $1000, If he sells a whopping 12 cars, then the sales commission is $6000!! Notice the variation in commission?? This is why it is a variable cost - because it is not a fixed cost, which you know regardless of what happens during the period.!
Is Commission a revenue or an expense?
if Commission is received then it is revenue but if commission is paid then it is expense, if commission is receivable then it is asset while if it is payable then it is liability.
Is commission a selling or administrative expense?
If commission is paid on selling the product then it is selling expense .
What is an example of a variable expense?
Any expense which is varying with levels of production is a variable expense. For example, with more production, expenses on raw materials will also increase. Consumption of raw material , thus , is a variable expense.
Is a car payment a variable expense or liability?
A car is a variable expense having the following properties: Car payment ( fixed Expense) Maintenance and usage costs (variable) So in total it is a variable expense. A car payment is considered a liability.
What is example of a variable expense?
Any expense which is varying with levels of production is a variable expense. For example, with more production, expenses on raw materials will also increase. Consumption of raw material , thus , is a variable expense.
What is an expense that does not change each month?
fixed expenses do not change, variable expenses do.
Is sales commission an expense or cost of sales?
Sales commission is a Cost of sales. But the salary of a sales agent is an expense.
Is sales commission a current liability or an expense?
If sales commission is payable in future time then it is current liability but if it is paid already then it is expense.
Is administrative expense a fixed cost or variable?
Fixed
What is the journal entry for commission to be paid?
[Debit] Commission expense xxxx [Credit] Commission payable xxxx
Which of these is an example of a variable expense?
Utilities
