What are Mixed Expenses?

Mixed expenses contain both fixed and variable components. There is a baseline fixed cost that does not vary, irrespective of changes in activity levels, as well as a variable cost component that will change in conjunction with activity. This means that a mixed expense will not be entirely eliminated, even when the activity level drops to zero.

Examples of Mixed Costs

Here are several examples of mixed expenses:

Utility bills. Includes a base service charge that is billed regardless of usage, and a variable portion that changes with the actual use of electricity or water.
Vehicle expenses. Includes a flat monthly leasing fee and insurance charge, and a variable portion for the cost of fuel and maintenance that increases with the distance driven.
Salesperson compensation. Includes fixed base pay, and a variable commission payment that is derived from sales volume.
Property maintenance. Includes a basic monthly service fee for routine maintenance, and extra charges for special requests and repairs.

Each of these mixed expenses shows how costs can have a predictable baseline with additional charges based on usage or specific activities.