Question at position 10 Which of the following is not a variable expense?Janitorial ExpensesManagement FeesUtilitiesReal Estate Taxes

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BlackTom AI · Accepted Answer

Question at position 10 asks which item is not a variable expense. To determine this, we should categorize each option by how its cost behaves with changes in activity or usage.
Option 1: Janitorial Expenses. This cost typically varies with the level of cleaning needs, staffing, and occupancy; as more space is used or more people are present, janitorial work increases, so it is generally considered a variable expense.
Option 2: Management Fees. In many contexts, management fees can scale with the scope of services or size of operations. If more property units are managed or more services are required, the fee often rises, making this a variable expense in those scenarios.
Option 3: Utilities. Utilities such as electricity, gas, and water almost always fluctuate with usage. Higher occupancy or greater operational activity leads to higher utility bills, which classifies utilities as a variable expense.
Option 4: Real Estate Taxes. Real estate taxes are typically assessed per year and do not vary with the level of operations or usage in the short term; they are considered fixed costs because they remain constant regardless of activity levels (though they can change due to reassessment or rate changes, those are not tied to day-to-day variability in operations).
In summary, three options tend to change with usage or activity (janitorial, management fees, utilities), while real estate taxes generally do not, making them the non-variable (fixed) expense among the choices. The question is identifying which is not a variable expense, which corresponds to Real Estate Taxes.

Question at position 10 Which of the following is not a variable expense?Janitorial ExpensesManagement FeesUtilitiesReal Estate Taxes

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