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fixed costs are costs that do not change in relation to levels of production unlike variable costs which do unlike variable costs fixed costs remained relatively constant on a month-to-month basis business activity doesnt affect fixed costs along with variable costs fixed costs make up the total cost of production as you can see on the graphic to the left variable costs go up as the quantity of output increases whereas fixed costs always remain the same we have to pay fixed costs on a regular basis therefore we see them as periodic costs the amount charged to expense generally changes very little from periods a period more docHubly business activity doesnt affect fixed costs renting office space for example is a fixed cost as it does not change often examples of fixed costs include rent utilities insurance wages interest expense and amortization lets suppose that John Doe Inc manufactures door handles the company has a lease on a building which costs fifteen thousand dollars pe
