Fixed Cost

IGC-DEFINITION (abbreviated)

Fixed costs
Fixed costs are the opposite of proportional costs (product costs). Fixed costs are incurred in order to ensure that the company can produce and sell. So fixed costs are defined by the company’s structures, in other words by its organisation and capacities, which is why they are also called structure costs. These costs are not unalterably fixed. If decisions are taken to alter a company’s structures, then the structure costs will also change.

from: IGC-Controller-Wörterbuch, International Group of Controlling (Hrsg.)

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Fixed Cost – in relation to a resource, it’s a cost that does not change with changes in level of resource output.

Source

IGC-Controller-Wörterbuch, International Group of Controlling (Hrsg.), 4. Auflage, Schäffer-Poeschel, Stuttgart, 2010

Author

Zieliński Tomasz