Fixed Costs - What are total fixed costs?

Q: What are total fixed costs?

Total costs are composed of both total fixed costs and total variable costs. Total fixed costs are the sum of all consistent, non-variable expenses a company must pay. For example, suppose a company leases office space for $10,000 per month, rents machinery for $5,000 per month, and has a $1,000 monthly utility bill.

Answer

Both the overall fixed costs and the entire variable costs make up total costs. All of a business's regular, non-changing outlays add up to its total fixed costs. Take the hypothetical monthly expense of $10,000 for office space, $5,000 for machines, and $1,000 for utilities as an example.

Fixed Costs - What are total fixed costs?

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