ENTREPRENEURSHIP

Detailed explanation-1: -Fixed costs do not vary with the production level. Total fixed costs remain the same, within the relevant range. However, the fixed cost per unit decreases as production increases, because the same fixed costs are spread over more units.

Detailed explanation-2: -In accounting, fixed costs are expenses that remain constant for a period of time irrespective of the level of outputs. Variable costs are expenses that change directly and proportionally to the changes in business activity level or volume. Even if the output is nil, fixed costs are incurred.

Detailed explanation-3: -Fixed costs are those that can’t be changed regardless of your business’s performance. Your company’s total fixed costs will be independent of your production level or sales volume. Also known as “indirect costs” or “overhead costs, ‘’ fixed costs are the critical expenses that keep your business afloat.