What is a fixed cost?
Fixed cost: A cost that stays the same each month, whether you sell a little or a lot, for example rent or a wage for a fixed shift.
Example
Nora pays $480 a month for a shared kitchen, $35 for a market stall on each of 4 Saturdays ($140) and $80 for her phone, website and insurance: $700 a month, whether she sells 100 buns or 1,000.
Made-up people and numbers from the cases of our course; the math is real.
A common mistake
Calling a cost fixed because it is paid monthly. A fee charged on every order grows with sales: it is variable.
Try it with your own numbers: Break-even calculator (free, no sign-up).
Practise this in block 1
Block 1 of Ownwise is free, with no account needed to start: short lessons on costs, margin and break-even, then a made-up case where you make the decisions.