• Fixed costs refer to expenses that a company must pay, regardless of any specific activities.

  • These costs are fixed for a certain period of time and do not change depending on the level of production.
  • Fixed costs can be direct or indirect and can affect profitability at different points in the income statement.
  • Companies have interest payments as a fixed cost, which is a factor in net income.
  • Cost structure management is an important part of business analysis, which considers the impact of fixed and variable costs on the business as a whole.