To find fixed cost , you use either a simple formula or a step‑by‑step “tally” method. Both give you the same result: all the costs that stay the same no matter how much you produce or sell.

What is fixed cost?

Fixed costs are expenses that do not change when your output changes (within a normal range).

Examples: rent, salaried wages, insurance, equipment depreciation, software subscriptions, property tax.

Formula: how to find fixed cost

If you know total cost, variable cost per unit, and units produced, use:

Fixed Cost=Total Cost of Production−(Variable Cost Per Unit×Number of Units Produced)\text{Fixed Cost}=\text{Total Cost of Production}-(\text{Variable Cost Per Unit}\times \text{Number of Units Produced})Fixed Cost=Total Cost of Production−(Variable Cost Per Unit×Number of Units Produced)

Example (story style):
Imagine a small doll company that spends 145,200 per month in total production costs and knows variable costs are 10 per doll for 6,000 dolls.

  • Variable cost total = 10 × 6,000 = 60,000.
  • Fixed cost = 145,200 − 60,000 = 85,200.

So the business has a fixed cost of 85,200 per month.

Tally method: step‑by‑step

If you do not have a clear variable cost per unit, you can find fixed cost by listing and adding the fixed items.

  1. List all expenses
    • Go through bank statements, receipts, contracts, and budgets.
 * Convert annual bills to monthly (divide by 12).
  1. Separate fixed vs variable
    • Fixed: rent, salaries, long‑term equipment leases, insurance, website fees, property tax.
 * Variable: direct materials, per‑unit shipping, sales commissions, piece‑rate labor.
  1. Add fixed costs
    • Add up all fixed items; the total is your fixed cost for that period (month, quarter, year).

Mini example:
A toy company lists these monthly fixed costs: rent 3,000, wages 80,000, equipment 2,000, website 200.

Total fixed cost = 3,000 + 80,000 + 2,000 + 200 = 85,200.

Fixed cost per unit

Once you know total fixed cost, you can spread it across each unit you produce:

Fixed Cost Per Unit=Total Fixed CostNumber of Units Produced\text{Fixed Cost Per Unit}=\frac{\text{Total Fixed Cost}}{\text{Number of Units Produced}}Fixed Cost Per Unit=Number of Units ProducedTotal Fixed Cost​

Using the earlier example:

  • Fixed cost = 85,200, units = 6,000.
  • Fixed cost per unit = 85,200 ÷ 6,000 = 14.20 per unit.

Quick HTML table: key formulas

html

<table>
  <thead>
    <tr>
      <th>What you want</th>
      <th>Formula</th>
      <th>Needs</th>
    </tr>
  </thead>
  <tbody>
    <tr>
      <td>Total fixed cost</td>
      <td>Fixed cost = Total cost − (Variable cost per unit × Units produced)</td>
      <td>Total cost, variable cost per unit, units</td>
    </tr>
    <tr>
      <td>Total fixed cost (tally method)</td>
      <td>Fixed cost = Sum of all fixed expenses for the period</td>
      <td>List of fixed expenses</td>
    </tr>
    <tr>
      <td>Fixed cost per unit</td>
      <td>Fixed cost per unit = Total fixed cost ÷ Units produced</td>
      <td>Total fixed cost, units</td>
    </tr>
  </tbody>
</table>

“Forum” style quick take

If you have total cost and variable cost per unit, subtract total variable cost from total cost. If you don’t, just list all the costs that don’t move with output and add them up.

TL;DR:

  • Use formula: Fixed cost = Total cost − (Variable cost per unit × Quantity).
  • Or list all non‑changing expenses (rent, salaries, insurance, etc.) and add them.

Information gathered from public forums or data available on the internet and portrayed here.