Fixed Cost for Dummies
noun
pronunciation: fɪkst_kɔstWhat does Fixed Cost really mean?
Alright, so fixed cost is a term we use in economics and business to describe expenses that stay the same no matter how much we make or produce. It's like those everyday things we have to pay for, like rent for our house or phone bill, that don't change even if we make a lot of money one month and a little less the next.
Let me explain it this way: Imagine you have to pay $500 for your rent every month, no matter how much you work or how many hours you put in. That $500 is your fixed cost because it stays the same. It's like having a monthly subscription to a streaming service - you pay the same fee whether you watch a lot of movies or just a few.
In business, fixed costs could be things like rent for a store, insurance, or the monthly salary for employees. It's important to know about fixed costs because they help us understand how much it costs to run a business even if we don't sell anything. So, in summary, fixed cost refers to those regular, unchanging expenses we have to pay regardless of how much we make or produce. Hope that helps!
Let me explain it this way: Imagine you have to pay $500 for your rent every month, no matter how much you work or how many hours you put in. That $500 is your fixed cost because it stays the same. It's like having a monthly subscription to a streaming service - you pay the same fee whether you watch a lot of movies or just a few.
In business, fixed costs could be things like rent for a store, insurance, or the monthly salary for employees. It's important to know about fixed costs because they help us understand how much it costs to run a business even if we don't sell anything. So, in summary, fixed cost refers to those regular, unchanging expenses we have to pay regardless of how much we make or produce. Hope that helps!
Revised and Fact checked by James Thompson on 2023-11-15 14:30:44
Fixed Cost In a sentece
Learn how to use Fixed Cost inside a sentece
- An example of a fixed cost is the rent that a business has to pay for its office space every month.
- Another example of a fixed cost is the insurance premium that a person has to pay every month for their car.
- A fixed cost for a student could be the monthly payment for their phone plan.
- For a restaurant, a fixed cost could be the lease payment for the building they operate in.
- A fixed cost for a family could be the monthly mortgage payment for their home.
Fixed Cost Synonyms
Words that can be interchanged for the original word in the same context.
Fixed Cost Hypernyms
Words that are more generic than the original word.
Fixed Cost Hyponyms
Words that are more specific than the original word.