Fixed Cost
Finance
Fixed Cost
Cost that does not change directly with short-term output volume within a relevant range.
Examples
- 01Rent, salaried staff and machine leases are fixed costs of EUR 1.2 million a year, whatever the volume.
- 02In the monthly review, fixed costs are tracked separately so their share per unit is clear when volume drops.
- 03Moving a line into a smaller building cuts fixed costs by EUR 150,000 a year.