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fixed cost
(redirected from fixed costs)

   Also found in: Dictionary/thesaurus, Medical, Wikipedia, Hutchinson 0.07 sec.
Fixed Cost
A cost that remains constant, regardless of any change in a company's activity.

Notes:
A good example is a lease payment. If you are leasing a building at $2,000 per month, then you will pay that amount each month, no matter how well or how poorly the business is doing.


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.

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A quick guide for analysis of loss-cost metrics recognizes that, on average, fixed costs represent just 20% to 25% of total program costs.
Fixed costs are those that were present even before we opened the door to the first patient or even if no patients were ever seen.
The closure of the plant, which employs 340 workers, is expected to reduce fixed costs in 2006 by $25 million.
 
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