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Some committed fixed costs are the most difficult of fixed costs to change because they are required to maintain basic operations. For example, rent is a fixed cost that is difficult to change because it is bound by a lease.

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What are some examples of committed fixed costs?

leasing costs, committed costs are fixed costs that are caused by the possession of facilities, materials, etc.


Why are Fixed costs also called capacity costs?

Fixed costs are considered capacity costs because if a company expands, fixed costs will change. Additionally, if a company adds more resources, fixed costs will change.


Fixed costs are those costs which are what?

Fixed and do not change. A variable cost changes. Fixed costs are things like rent, salaries, or any other cost that does not change over time.


What are fixed costs in the long run?

There is no fixed answer because all costs are subject to change in the long-run.


How many types of cost?

There are variable and fixed costs. Businesses can manipulate the variable costs, but they cannot change their fixed costs in business.


Why it is sometimes difficult to separate costs into variable costs and fixed costs?

Some costs are semi-variable, e.g. electricity, maintenance, and rise with output but not inproportion. Labour may be fixed in the short run.


What are Fixed and variable costs in the workplace?

fixed cost will not change with the change in output variable cost will change with chang in output


Why it is sometimes difficult to separate costs into variable and fixed costs?

Some costs are semi-variable, e.g. electricity, maintenance, and rise with output but not inproportion. Labour may be fixed in the short run.


How would you describe total fixed costs?

Total fixed costs do not vary as volume levels change within the relevant range.


What are a business firm's fixed and variable costs of production?

Fixed costs are costs that do not vary with the level of output, such as rent and insurance premiums. Variable costs are costs that change with the level of output, such as wages and raw materials.


What is fixed costs plus variable costs?

Fixed costs are costs that DO NOT change in response to changes to activity levels.Variable costs are costs that change in proportion to changes in volume or activity.It's simple, you just have to remember:Fixed cost:Total - DO NOT changePer unit -CHANGES (usually, decrease)Variable cost:Per unit - SAMETotal -CHANGES


What is the importance of fixed costs versus variable costs in making a business profitable?

The importance of knowing which costs are fixed and which costs are very important in making a business profitable. In order to budget effectively, one needs to know costs that will always be the same (fixed) and the ones that sometimes change (variable).