Technical definition
A cost that remains constant in total within a relevant activity range for a given period.
How it works
Total fixed cost stays stable while fixed cost per unit falls as volume increases. Beyond the relevant range, additional capacity can create a new cost step.
Everyday example
Monthly office rent of $4,000 is fixed for the current space whether 100 or 300 orders are processed.
Common pitfall
Fixed does not mean permanent or uncontrollable; it depends on horizon, contract and capacity range.