ACSM Certified Exercise Physiologist (EP-C) Practice Exam

The correct response highlights the fundamental distinction between variable and fixed expenses in financial contexts. Variable expenses are those costs that change in direct relation to an individual's or business's level of activity or usage. For example, in a business, costs such as raw materials, direct labor, and utility expenses can fluctuate based on production levels, making them variable.

On the other hand, fixed expenses are costs that remain constant regardless of the level of activity or usage over a certain period, typically reflecting obligations such as rent, salaries (for permanent staff), and insurance. These costs do not change based on how much a business produces or how much activity occurs.

Therefore, the emphasis on variable expenses being contingent on usage, while fixed expenses remain stable over time, effectively encapsulates the essential distinction, defining how each type of expense behaves in financial planning and budgeting.