fixed expenses formula is not like variable costs, but in financial analysis, they can be expressed as:
Fixed Expenses = Total Expenses – Variable Expenses
This equation separates constant costs from those that change with business activity. For example, if a company’s total monthly expenses are $50,000 and $30,000 are variable, the fixed expenses would be $20,000. This calculation is essential for understanding break-even points, budgeting, and cost control. Knowing your fixed expenses allows for more accurate forecasting and helps determine how much revenue you need to sustain your business.
