ECONOMICS

Detailed explanation-1: -Examples of fixed costs are rent and lease costs, salaries, utility bills, insurance, and loan repayments. Some kinds of taxes, like business licenses, are also fixed costs. Since you have to pay fixed costs regardless of how much you sell, you should be careful about adding fixed costs to your small business.

Detailed explanation-2: -Share. Fixed costs are costs that do not change when sales or production volumes increase or decrease. This is because they are not directly associated with manufacturing a product or delivering a service. As a result, fixed costs are considered to be indirect costs.

Detailed explanation-3: -Why are fixed costs important? Fixed costs are important because they can help you determine the current and future financial needs of a company. When you lower your fixed costs, your expenses may decrease and your profits may increase. In turn, this can increase your profit margin.

Detailed explanation-4: -Depreciation is one common fixed cost that is recorded as an indirect expense. Companies create a depreciation expense schedule for asset investments with values falling over time.