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18 Examples of Fixed Costs

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Fixed costs are business expenditures that aren't affected by sales, strategic initiatives or production volumes. These can be contrasted with variable costs that are scaled up and down over time in response to sales and strategy. The following are common examples of fixed costs.
Administrative Fees
Business Licenses
Education & Training
Employee Benefits
Equipment Lease
Interest Expense
Internet & Communications
Pension Plan Contributions
Property Taxes
Software Licences
Vehicle Lease


Generally speaking, variable costs are preferable to fixed costs as they allow a business to quickly cut costs in response to business conditions.
Business strategies are often designed to shift from fixed costs to variable costs. For example, outsourcing often reduces fixed costs.
Utilities are customarily listed as a fixed cost. For some businesses, these are highly variable and should be considered as such.
Advertising is often incorrectly listed as a fixed cost. This is typically one of the easiest costs to cut and is completely variable with strategy.
Contracted salaries are fixed costs. Hourly wages, consulting fees and professional services are often variable costs.
Overview: Fixed Costs
Costs that remain constant as business volumes and activities change.
Related Concepts

Business Costs

This is the complete list of articles we have written about business costs.
Applied Cost
Business Equipment
Capacity Cost
Capital Improvement
Carrying Costs
Closing Costs
Cost Of Capital
Cost Of Revenue
Cost Of Living
Direct Cost
Distress Cost
Fixed Costs
Friction Cost
Employee Costs
Holding Costs
Intangible Cost
Marginal Cost
Operating Cost
Operating Expenses
Legacy Costs
Outlay Cost
Lifetime Cost
Overhead Costs
Menu Costs
Relevant Cost
Normal Costs
Sunk Costs
Tangible Cost
Operational Costs
Travel Expenses
Unit Cost
Opportunity Cost
Variable Costs
Prospective Cost
Semi Variable Cost
Step Costs
Switching Costs
Transaction Costs
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