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 ?
We then calculated the total fixed cost allocated to each model as the fixed overhead rate (total POHR less the variable overhead rate; both are available in the Overhead Budget) times the direct labor hours required for each type of bicycle, as reported in the Ending Inventory Budget.
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%
A straight horizontal line depicts total fixed costs.
Total fixed costs declined $80 million year-over-year, and as a percentage of sales improved 70 basis points to 39.
Total fixed costs decreased to $174 million from $191 million in the last fiscal quarter.
While total fixed costs were lower than last year, and fixed cost productivity (measured as percent of sales) improved 40 basis points versus last year, total fixed costs, excluding a currency translation benefit and portfolio changes, were slightly higher.
The total fixed costs decrease corresponding to the combined effect of these restructuring measures is FrF 350 million, the full impact of which will be substantially felt from the year 2000 onwards, FrF 175 million of these applying to 1999.
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.

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