Fundamentals of Cost Accounting 3rd Edition by William N. Lanen, Shannon W. Anderson, Michael Maher

Exercise 5

Fixed costs are often defined as “fixed over the short run.” Does this mean that they are not fixed over the long run? Why or why not?

Step 1 of 3

Fixed costs:

Fixed cost is a cost or expense that does not change with the increase or number if goods or services produced or sold. They remain constant irrespective of the change.

Example: depreciation, insurance, rent etc.