fixed cost


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Related to fixed cost: Direct cost, Average fixed cost, Sunk cost

Fixed cost

A cost that is fixed in total for a given period of time and for given production levels.
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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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
When the customer charge is low and significant amounts of fixed cost and energy are included in the energy charge, the cooperative is paying out fixed cost and margin rather than recovering it.
* Fixed costs corresponding to unutilized capacity are identified as "unutilized capacity costs." In this case, unutilized capacity costs are $75,000, which is equal to the total fixed costs minus the fixed costs allocated to cost of sales.
Fixed costs include depreciation of cages and depreciation of livestock business equipment and depreciation of non-livestock equipment.
I find that firms with fixed cost structures have more variable future cash flows and more uncertain future operating incomes.
Considered a fixed cost as an entitlement similar to CIVPAY.
Using both press releases and annual reports, we were able to estimate the dollar value of fixed costs for GMNA to be between $40 billion and $29 billion (see Table 1).
Explained by: Sales Volume Variance $420 Favorable Selling Price Variance 5,400 Unfavorable Variable Cost Variance 1,130 Unfavorable Direct Fixed Cost Variance 400 Unfavorable Indirect Fixed Cost Variance 2,350 Unfavorable Total Variances $8,860
We assume salary to behave like a variable cost when the division leaves the group, since the group will no longer be paying this as a fixed cost. So, the division's lost contribution margin equals $400,000 {$3,000,00 on revenue -- ($500,000 lost variable cost + $2,100,000 lost salary)l.
"The current issue between the harbour authority and the assembly is not about if the council is entitled to the balance of the fixed cost budget, but when.
When labor is considered a fixed cost, there is no budget to meet such changes in resident care needs.