# fixed cost

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Related to Total fixed costs: 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 ?
break-even point = total fixed costs / camper contribution.
Finally, we must assume that we're staying within the "relevant range" (the range of production where total fixed costs and variable costs per unit remain constant) and that the time value of money isn't material.
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.
A straight horizontal line depicts total fixed costs.
Costs -5 Logistic Costs -4 Administration Costs -5 Sales & Marketing -10 Unabsorbed Costs -2 Total Fixed Costs -31 -31% Net Result Before Tax 6 6%
Total fixed costs decreased to \$174 million from \$191 million in the last fiscal quarter.
Total fixed costs decreased as a percent of revenue from 34 percent in the March quarter to 33 percent, or \$159 million, in the June quarter.
Total fixed costs decreased as a percent of revenue to 34%, or \$140 million, in the March quarter from 35% in the December quarter.

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