A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses that have to be paid by a company, independent of any business activity. It is one of the two components of the total cost of a good or service, along with variable cost.
An example of a fixed cost would be a company's lease on a building. If a company has to pay $10,000 each month to cover the cost of the lease but does not manufacture anything during the month, the lease payment is still due in full.
In economics, a business can achieve economies of scale when it produces enough goods to spread fixed costs. For example, the $100,000 lease spread out over 100,000 widgets means that each widget carries with it $1 in fixed costs. If the company produces 200,000 widgets, the fixed cost per unit drops to 50 cents.
Investment dictionary. Academic. 2012.
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fixed cost — A cost that does not vary with the amount or degree of production. The costs that remain if an activity or process stops. (Also see variable cost.) … Glossary of postal terms
Fixed cost — A cost that is fixed in total for a given period of time and for given production levels. The New York Times Financial Glossary * * * fixed cost fixed cost ➔ cost1 * * * fixed cost UK US noun [C, usually plural] (also fixed expense, standby cost) … Financial and business terms
fixed cost — A cost that is fixed in total for a given period of time and for given production levels. Bloomberg Financial Dictionary * * * fixed cost fixed cost ➔ cost1 * * * fixed cost UK US noun [C, usually plural] (also fixed expense, standby cost) ►… … Financial and business terms
fixed cost — noun a periodic charge that does not vary with business volume (as insurance or rent or mortgage payments etc.) • Syn: ↑fixed charge, ↑fixed costs • Hypernyms: ↑charge • Hyponyms: ↑cover charge, ↑cover, ↑ … Useful english dictionary
fixed cost — UK / US noun [countable, usually plural] Word forms fixed cost : singular fixed cost plural fixed costs business a cost such as rent that a company has to pay that does not depend on how much it produces … English dictionary
Fixed cost — Fixed costs are business expenses that are not dependent on the level of production or sales. They tend to be time related, such as salaries or rents being paid per month . This is in contrast to Variable costs, which are volume related (and are… … Wikipedia
fixed cost — fixed expense An item of expenditure that remains unchanged, in total, irrespective of changes in the levels of production or sales. Examples are business rates, rent, and some salaries. Compare: semi variable cost, variable cost … Accounting dictionary
fixed cost — fixed expense An item of expenditure that remains unchanged, in total, irrespective of changes in the levels of production or sales. Examples are business rates, rent, and some salaries. Compare semi variable cost; variable cost … Big dictionary of business and management
fixed cost — cost whose size is not dependent upon the amount of business done … English contemporary dictionary
fixed cost — An item of expenditure that is not directly sensitive to changes in activity levels. Rental, insurance, and salary costs are typical fixed costs for many manufacturing organizations. Contrast *variable cost and *semi variable cost … Auditor's dictionary