Definition, Meaning & Synonyms
fixed-cost
noun
/fɪkst kɔːst/
Definition
A fixed cost is an expense that does not change regardless of the level of goods or services produced by a business.
Examples
- The rent for the office is a fixed-cost that we must pay every month.
- Even if sales drop, the fixed costs such as salaries and leases must still be covered.
- Understanding fixed costs is crucial for budgeting and financial planning in any business.
Meaning
Fixed costs remain constant over a specific period and do not fluctuate with production volume, making them predictable expenses for a company.
Synonyms
- Overhead expense
- Fixed expense
- Constant cost
