Fixed costs
Fixed costs are expenses that stay the same regardless of how much a business sells, such as rent, salaries and software subscriptions.
Fixed costs arrive whether you sell nothing or everything. They set the height of the bar that contribution margin has to clear.
The classification decides your break-even point, so misplacing a cost distorts it. Putting a variable cost in the fixed pile makes break-even look higher than it is; the reverse flatters you.
Related terms
Keep this number live
Plainhub computes fixed costs from money you record in plain words, so it is current when you need it rather than the night before a board meeting.
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