ECONOMICS

Detailed explanation-1: -A fixed cost is a cost that remains constant; it does not change with the output level of goods and services. It is an operating expense of a business, but it is independent of business activity. An example of fixed cost is a rent payment.

Detailed explanation-2: -Fixed costs are indirect costs and have to be paid irrespective of the level of production. Even if zero output is being produced these costs have to be incurred. These costs include rent of the factory, interest payments on borrowed financial capital, payment on the lease for factory equipment.

Detailed explanation-3: -Fixed costs are costs that do not change when output changes. Examples include insurance, rent, normal profit, setup costs and depreciation. Another name for fixed costs is overhead. Variable costs, also called direct costs, depend on output.

Detailed explanation-4: -Fixed costs are those that don’t change over the course of time. They are usually established by contract agreements or schedules. These are the base costs involved in operating a business comprehensively. Once established, fixed costs do not change over the life of an agreement or cost schedule.

Detailed explanation-5: -Companies incur two types of production costs: variable and fixed costs. Variable costs change based on the amount of output produced. Variable costs may include labor, commissions, and raw materials. Fixed costs remain the same regardless of production output.