Fixed Costs
Expenses unchanged by production/sales volume.
Formula
Fixed Cost per Unit = Total Fixed Costs ÷ Output
Real World
A cinema pays £10,000 per month in rent regardless of ticket sales; if it sells 5,000 tickets that month, fixed cost per ticket is £2 — but rises to £10 if only 1,000 tickets are sold.
Exam Focus
Remember fixed cost per unit falls as output rises — this concept underpins economies of scale and is a common 'explain' target.
How well did you know this?