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

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Prepare for the Certified Apartment Portfolio Supervisor exam with our comprehensive quiz based on Module 2. Engage with multiple-choice questions and detailed explanations to help you enhance your knowledge and excel in your examination.

Practice this question and more.

Which of the following is an example of a variable expense?

Property taxes
Insurance payments
Utilities costs
Depreciation

The correct answer is: Utilities costs

Utilities costs represent a variable expense because they fluctuate based on usage and occupancy levels. Unlike fixed expenses like property taxes and insurance payments, which remain constant regardless of the property’s occupancy or operational changes, utilities can vary significantly from month to month. For example, during the summer months, air conditioning usage may lead to higher electricity bills, while winter may bring increased heating costs. This variability closely ties utility costs to the actual consumption and can change depending on the number of residents in a property, making it a prime example of a variable expense. In contrast, property taxes and insurance payments remain stable over time and are predictable expenses. Depreciation, while it represents a cost related to the property’s value over time, is typically treated as a non-cash expense and is also fixed, calculated based on the property's original cost rather than actual usage.