What is a Fixed Cost?

fixed cost  Fixed cost is one of the two major components of the total cost of production The other component is the variable cost Examples are monthly We can show fixed costs on the production costs graph of a firm This graph is plotted with cost on the vertical axis and quantity of output on the horizontal

Fixed cost is one of the two major components of the total cost of production The other component is the variable cost Examples are monthly A fixed cost stays the same regardless of how active your business is The term is often used interchangeably with 'overheads', but these are not the same

Fixed costs are expenses that remain the same no matter how much a company produces, such as rent, property tax, insurance, and depreciation  Definition of Fixed Cost A fixed cost is one that does not change in total within a reasonable range of activity Since the fixed cost remains constant in