fixed cost

fixed cost definition - finance
A cost that is constant regardless of the level of sales or production. For instance, in a manufacturing plant, expenses such as rent, depreciation, and insurance must be paid even if the factory closes down for a two-week period. Fixed costs contrast with variable costs, such as temporary labor or materials that are used to produce goods, which vary depending on the level of sales or production.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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