Fixed cost management

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Fixed cost management describes the advantageous structuring of fixed costs in the company. Fixed costs are all those costs that arise regardless of the employment ( output volume, production volume) in the company. The prerequisite is therefore not that the exact amount of the costs is known in advance. The amount of fixed costs can depend on certain consumption components (e.g. electricity consumption in the office); it must be independent of the marketable amount of output (so-called employment).

Companies operate fixed cost management in order to achieve an increase in fixed cost transparency and the advantageous design of the fixed cost block. In order to be able to achieve these goals, differentiated cost accounting is required, which provides the following information:

  • What contracts has the company entered into, resulting in fixed costs?
  • What are the binding periods of the contracts and what is their timing in relation to the calendar year?
  • Which notice periods and times of notice have to be observed?
  • Which commitment intervals apply when the termination dates have passed?
  • What are the remaining terms of contracts?
  • Is there potential of ownership (mostly in the form of fixed assets) that result in fixed costs?
  • What are the useful lives of this property potential?

On the basis of this information, methods are then to be used with which it can be checked whether the fixed costs can be reduced or whether fixed costs can be made more flexible.

Individual evidence

  1. Kremin-Buch, Beate: Strategisches Kostenmanagement, Basis und Moderne Instrumente, 4th edition, Wiesbaden, Gabler, 2007, pp. 23–33.