Fixed Cost

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Fixed cost

A cost that is fixed in total for a given period of time and for given production levels.

fixed cost

A cost that remains unchanged even with variations in output. An airline with 20 airplanes has the fixed costs of depreciation and interest (if the planes are partially financed with debt), regardless of the number of times the planes fly or the number of seats filled on each flight. Firms with high fixed costs tend to engage in price wars and cutthroat competition because extra revenues incur little extra expense. These firms tend to experience wide swings in profits. Compare variable cost.

Fixed Cost

An expense that does not change from time period to time period. For example, a company may rent a piece of property for $4,000 per month. A company often prefers to have fixed costs because they reduce uncertainty, but this is not always possible.

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The solution, consolidation, will occur as soon as the construction market becomes truly competitive, and as soon as the contracts between general contractors and owners become a truly fixed cost.

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The additional volume will allow Aleris to maximize throughput at our other rolling mills and more efficiently utilize our fixed cost base, making us more cost competitive on a global basis.

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From evaluating one's position and its pros and cons to overcome fear and minimizing fixed cost of living in the early stages, 7 STEPS TO LEAVING THE RAT RACE: FREE YOURSELF FROM THE 9 TO 5 GRIND covers part-time work, self-employment opportunities, and how to live like a pauper during the early stages of change.

7 Steps to Leaving the Rat Race by Donovan, Diane C. / MBR Bookwatch

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