What are the different types of fixed operating costs?

Fixed operating costs represent any outflow of cash for commercial needs that have not changed over time. In most cases, all businesses in their operations have some type of fixed costs. Most of the costs concern the company's equipment, staff and equipment. In accounting, fixed operating costs can lead to a concept known as an operating lever. The operating lever effect is a combination between the company's fixed and variable costs, with higher fixed costs to create more risky situations. Common fixed costs include rent, rental payments, depreciation and real estate tax. Most of these fixed costs remain the same for the entire time when the company remains in operation. However, costs may move up or down at different time points; For example, when renting, the company can restore rent, but at higher costs. Increased real estate taxes can also be moving finals on XED when governments change tax rates. Fixed costs herefrom the company's employees. Most employees include the company's management team and other administrative employees. Accountants often separate salaries for different classifications, each of which concerns a specific distribution in the company. This allows accounting to assess each department in terms of inevitable compensation of employees.

Equipment

is the most common in large manufacturing companies, although other types of equipment can be found in all businesses. Fixed operating costs include payments for equipment, depreciation and maintenance. All costs here usually move to the allocation fund for goods or services created by the company. Although the costs do not change, it may not continue in constant. For example, the company will only depreciate its equipment until it reaches the values ​​of rescue; Then the costs disappear.

Many companies use external funds to buy and install assets that relate to themby evidence and equipment. These loans create a higher risk of business because payments must always go to the supplier or the supplier regardless of operational activities. In economic contractions, the company can experience financial problems due to abundant fixed operating costs and low capital. External investors tend to consider this practice sometimes unfavorable. Only companies with a strong combination of solid and variable operating costs can prove to be healthy during difficult economic times.