# fixed cost

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Related to Total fixed cost: Total variable cost

## Fixed cost

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

## 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.

## 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.
References in periodicals archive ?
Once you have the weighted average contribution margin, the breakeven point is an easy calculation: simply divide total fixed costs (\$793,260 for Bob's) by the weighted average contribution margin.
5,6] As shown in Figure 1, total costs, therefore, are the summations of the variable, fixed, and semivariable costs or the total variable and the total fixed costs.
Farm total fixed costs are predicted to rise with SSM due to durable investments in machinery, mapping and resource inventories, and human capital.
Total fixed costs were \$258,304 and total variable costs were \$396,763.
10%) and multiply that portion by total fixed costs.
p = selling price per unit; v = variable cost per unit; Q = total quantity of units produced or sold; FC = total fixed costs.
Facilities will close and employee numbers will be reduced to decrease total fixed costs.
We know that the total fixed costs for the agency are \$555,100.
1 GINGER LAKE CAMP 2 BUDGET ANALYSIS PRIOR BUDGETED 3 YEAR AMOUNT 4 NUMBER OF CAMPERS 100 100 5 6 TUITION REVENUE \$350,000 \$370,000 7 8 FIXED COSTS 9 Rent or depreciation & property tax 75,000 80,000 10 Staff salaries 65,000 70,000 11 Office expense & promotion 20,000 25,000 12 Fixed program costs 12,000 15,000 13 Other fixed costs 25,000 25,000 14 TOTAL FIXED COSTS 197,000 215,000 15 16 VARIABLE COSTS 17 Food 36,000 37,000 18 Counselors' salaries 45,000 50,000 19 Insurance premiums - variable 16,000 17,000 20 Supplies 15,000 16,000 21 Other variable costs 8,000 10,000 22 TOTAL VARIABLE COSTS 120,000 130,000 23 PRETAX OPERATING INCOME \$ 33,000 \$ 25,000 24 CAMPER CONTRIBUTION \$ 2,300 \$ 2,400 25 CAMPERS TO BREAK EVEN 86 90
If not, the total fixed costs for all machines will be underabsorbed.
Owner's return \$100,000 Entrepreneurial overhead \$200,000 Fixed costs Appraisal library \$ 15,000 Office rent \$ 30,000 Total fixed costs \$ 45,000 Variable costs Telephones \$ 7,000 Utilities \$ 10,000 Supplies \$ 2,000 Auto reimbursement \$ 4,000 Miscellaneous \$ 500 Total variable costs \$ 23,500 Labor costs Secretary \$ 30,000 Part-time market researcher \$ 15,000 Appraiser 1 \$ 60,000 Appraiser 2 \$ 60,000 Appraiser 3 \$ 60,000 Benefits \$ 30,000 Total labor costs \$255,000 Total costs \$523,500 Number of appraisers 3 Cost per desk (breakeven) \$174,500 Number of workable hours in a year 2,000 Breakeven cost per hour \$ 87.
In order to make individual product CVP analysis relevant, as much of the total fixed costs as possible must be traced to the individual product lines.

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