Question

What is meant by Fixed cost?

Hint:

Fixed costs are "stuck." Whether you produce zero units or a thousand units, you still have to pay them (like your monthly rent).

Answer 1

Fixed costs are business expenses that do not vary with the level of output or sales. These costs have to be paid by a company irrespective of its level of production. They are often referred to as "overhead" costs. Examples of fixed costs include rent for the factory or office space, salaries of administrative staff, insurance premiums, and depreciation of machinery.