Costs that remain constant regardless of the level of production or sales.
Fixed costs refer to the regular and predictable expenses that remain constant regardless of the level of business activity or sales volume. These costs do not vary in the short term and are incurred consistently over time. Examples of fixed costs include rent, insurance premiums, utilities, salaries, and lease payments. As a small business owner, understanding and managing fixed costs is crucial for budgeting, pricing, and overall financial planning. By identifying and monitoring fixed costs, businesses can make informed decisions to optimize profitability and ensure financial stability.