What are the fixed costs?

In almost any case, some expenses are involved in the operation of the company. These are known as operating costs. There are usually two groups of operating costs. One of them is variable costs that are not constant. The second is fixed costs that are regularly incurred, regardless of the volume of business. If the money must be provided for regular payment per item, this is probably fixed costs. For example, a printing company can copy a 20 -year rental machine. Payments may be required in the first month. This is a fixed cost. However, it should be noted that after the lease, the lease agreement will have to be extended either, otherwise another machine must be rented for the company to work. For this reason, the rental of a machine is cled with fixed costs. The maintenance of the copy machine is, for example, variable costs. If there is no store, it will not be necessary to replace the toner of the machine. Repairs will only be necessary if part of the machine or break. Because these items nevThey are regular expenses, it is not a fixed cost.

Although fixed costs are characterized by regular payments, it does not mean that prices are set. Fixed costs may fluctuate. Mortgage for the building can be considered a fixed cost. In some places, mortgages are influenced by national interest rates. This means that if the interest rate increases, the price of people's mortgages will increase.

electricity is also generally considered to be fixed costs. In most cases, the electricity account will differ from month to month. The part of the bill is influenced by the volume of business, but not to the extent that there is a possibility that the months can pass without a bill. Even if the company is closed for the season or if no transactions with customers are doing for a certain period of time, it is likely that electricity will flow to this place and therefore an account needs to be paid.