Companies focus on their fixed costs to maximize profits at the end of the fiscal year. If a company's fixed costs are too high, the company might not create a profit for that fiscal period.

So many of a business’ costs fluctuate based on operations. For example, the more products you make, the more you’ll spend on materials to make them. However, there are several important costs that ...

When sales increase, it changes certain financial aspects of your business, such as the overhead applied to each unit, your profit margins and your unit fixed costs. Understanding how sales changes ...

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Charlene Rhinehart is a CPA , CFE, chair of ...

In traditional cost accounting for manufacturing, categorizing costs as fixed or variable has been part of accepted practice for a long time. In recent years, the practice has diminished because this ...

I frequently hear talk about comparative shop labor rates and outsourcing. A lot of it makes sense, and it certainly is important to constantly check that the services you deliver are competitive with ...

The high-low method is used in cost accounting to estimate fixed and variable costs based on a business's highest and lowest levels of activity. By focusing on these extremes, the high-low method ...

Brian Beers is a digital editor, writer, Emmy-nominated producer, and content expert with 15+ years of experience writing about corporate finance & accounting, fundamental analysis, and investing. Amy ...

A major part of budgeting is projecting fixed expenses versus variable expenses. The fixed ones are often much simpler to plan for because they will change less frequently and often the merchant ...