APT Initiatives
APT Business & Economics Resources
Minimising Workloads, Maximising Performance
Established in 1999

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Fixed costs

Costs that remain the same (at least in the short term) regardless of the output quantity, ie number of products produced, number of people served, etc. These include, for example, rent (if premises are leased instead of purchased outright), mortgage payments and interest on other loans, salaries of managers, business rates, and insurance. These payments are fixed irrespective of the level of business activity. Obviously, if rent is too high then, in the long run, the business will consider moving but this cannot be immediately. For the moment, the owners of the business are committed under the terms of a lease to pay a fixed rent.

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