. What is a fixed cost?
How is a fixed cost used in business?
What is fixed cost and its formula? A fixed cost is a cost that does not change with an increase or decrease in the amount of goods or services produced. A good example of a fixed cost is rent. A company will continue to pay the same amount of rent each month regardless of how many products they produce. Formula:
Fixed cost = Total cost of production - Variable cost What is fixed cost also known as? Fixed cost is a term used in financial accounting that refers to expenses that remain constant regardless of changes in production levels. Common examples of fixed costs include rent, insurance, and interest payments.