Definition - What does Fixed Expenses mean?
Fixed expenses are expenses that stay roughly the same over long periods of time. In the context of the law, businesses commonly have a number of fixed expenses that they need to pay in order to legally remain in operation. Accountants and other financial data-based professionals commonly keep track of fixed expenses for companies.
Justipedia explains Fixed Expenses
Fixed expenses are an alternative to variable expenses. Variable expenses are expenses that commonly go up and down in price, and that come and go. Examples of fixed expenses include rent, insurance, loan payments, etc. Examples of variable expenses include sales commissions, one-time purchases, inventory, etc. Many businesses have to pay both fixed and variable expenses. Companies usually have a good idea of what to expect for fixed prices, because they tend to stay the same. However, anticipating variable expenses can be a lot more difficult.
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