Financial Terminology Series - 4

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TERM OF THE DAY


FIXED COST



Fixed cost is the cost which does not get change with the change in goods or services increase or decrease in production or sale. Fixed cost is the operating expenses, borne by the manufacturer or service provider and remain associated independently with any business activity.

Break Even analysis used in determining the pricing and production level or Sales turnover. Breakeven analysis is that condition in which company neither have profit nor Loss.


Fixed costs are part of the total cost structure of a company. It plays a crucial role in guaranteeing its profitability.

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