fixed cost
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aspect of economic theory
- In theory of production: The production function
…another group, the second, covers fixed cost (accountants’ “overhead costs”), which includes items not easily varied. The discussion will deal first with variable cost.
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place in profit planning
- In business finance: Profit planning
This will increase fixed costs (costs that are relatively constant and do not decrease when the firm is operating at levels below full capacity). The higher the proportion of fixed costs to total costs, the higher must be the level of operation before profits begin, and the more…
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principles of accounting
- In accounting: Cost finding
Total fixed costs, in contrast, are the same at all volume levels within the normal range.
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relationship to production
- In cost: How costs are measured
These are called fixed costs. Other costs, like labor and raw materials, can increase or decrease depending on how much is produced. These are called variable costs.
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total cost
- In total cost
…as the combination of all fixed costs (e.g., the costs of a building lease and of heavy machinery), which do not change with the quantity of output produced, and all variable costs (e.g., the costs of labour and of raw materials), which do change with the level of output. If…
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