Which category includes expenses that are predetermined and generally do not change?

Fixed expenses are costs that remain consistent over time, regardless of changes in activity levels or consumption. These predetermined expenses include items such as rent, salaries, and insurance premiums, which must be paid at regular intervals and do not vary with the volume of goods or services produced or consumed. This characteristic makes them predictable and easier for individuals and businesses to budget for.

In contrast, variable expenses can fluctuate based on usage or consumption, while unexpected expenses arise out of unforeseen circumstances, adding uncertainty to financial planning. Discretionary expenses are non-essential costs that can be adjusted or eliminated based on preference and availability of funds. Therefore, fixed expenses play a crucial role in budgeting as they provide a stable foundation for financial planning, as their predictable nature allows for better management of overall finances.