Certified Apartment Portfolio Supervisor (CAPS) Practice Exam - Module 2

How are variable expenses generally characterized?

1. Non-controllable and fixed

2. Controllable and may fluctuate with occupancy

3. Fixed and do not change

4. Independent of property operations

The correct answer is: Controllable and may fluctuate with occupancy

Variable expenses are generally characterized as controllable costs that can fluctuate based on occupancy levels and other factors. This means that when occupancy increases, certain variable expenses, such as utilities or maintenance costs, may also increase due to higher usage, while they may decrease when occupancy is low. Property managers can often manage these expenses by implementing strategies that optimize resource use or adjust staffing levels according to demand. Understanding that these expenses are controllable allows apartment managers to strategically plan budgets and react to changes in the property’s operational conditions. The other characterizations do not accurately reflect the nature of variable expenses, which is why they do not apply. For instance, variable expenses are not fixed; if they were, they would not fluctuate with usage. Additionally, claiming that they are independent of property operations overlooks the inherent relationship between occupancy levels and these costs.