![fixed expenses definition fixed expenses definition](https://www.spcdn.org/images/average-fixed-cost-division-method.png)
Let’s say you operate a car dealership, where you pay your salesmen a base salary, regardless of how many vehicles they sell.
![fixed expenses definition fixed expenses definition](https://i.ytimg.com/vi/Z_eQ5CGQViE/maxresdefault.jpg)
Anything higher than that minimum amount is based on how much revenue you earn.įor instance, if you have employees who earn a sales commission, this is a semi-variable cost. Semi-variable costs are those that cost you a minimum amount every month.
![fixed expenses definition fixed expenses definition](http://education-portal.com/cimages/multimages/16/VariableCost.jpg)
FIXED EXPENSES DEFINITION HOW TO
Understanding the difference between these two categories as well as how to tell them apart on your financial statements can make it easier for you. If you want to increase your profit, you have to lower both your fixed and variable costs. Fixed Costs Vs Variable Costs: What’s The Difference?