Fixed Costs/Expenses

Fixed costs remain the same, no matter what happens with income.

A business produces income.

To produce this income, the business will incur costs.

These costs are made up of two parts.

One part comprises variable costs (for more, see variable costs)

The other part comprises fixed costs.

Fixed costs include things such as rent, admin salaries, insurance.

These costs need to be paid regardless of whether the business earns income or not.

Furthermore, they always remain at the same level no matter what.

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