What is the meaning / definition of Fixed Costs in the ?

Fixed Costs, abbreviated as , are costs which are invariable, meaning they relatively constant in value despite changes in production or sales rates. Fixed Costs, mixed costs and variable costs make up the total costs at any business. In the hospitality industry Fixed Costs make up a large percentage of total costs incurring, as hotels require many expensive assets such as buildings, technology, furniture and . Successful Hotel Operators are able to reduce Fixed Costs, thereby profitability for hospitality businesses

Examples of Fixed Costs would be: rent, mortgage, salaries, insurance, taxes, utilities, land, building, internet, telephone plans, advertising cost, music entertainment, reservation expenses, newspaper subscriptions etc.

Fixed costs are typically found under operating expenses. The concept is used in financial analysis to find the break-even point of a business.

  • Formula: Fixed Costs = Total Costs – Variable Costs

See Also:

  • Variable Costs
  • Total Costs


  • Invariable Costs


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