Overview of cost definitions and costing methods by James Ruth

Fixed cost: Includes all costs that do not vary with activity for an accounting period. Fixed costs are, at any time, the inevitable costs that must be paid regardless of the level of output and of the resources used. A Fixed Cost is therefore not an Opportunity Cost. Overhead is considered a fixed cost, even though it may vary somewhat according to the amount of activity. Any cost that does not vary depending on production, volume, use, or sales levels, such as rent, property tax, insurance, or interest expense. Related Terms: variable cost, total cost, fixed expenses