Identify all fixed expenses that do not change with production or sales volume
Add together costs such as rent, salaries, insurance, lease payments, and depreciation
Use the formula: Fixed Cost = Total Cost – Variable Cost
If total cost and variable cost are known, subtract variable cost from total cost
If calculating from unit cost, use: Fixed Cost = Total Production Cost – Total Variable Cost
Divide total fixed cost by the number of units only if you need fixed cost per unit
Keep the time period consistent when calculating fixed cost
Review financial records to ensure all fixed expenses are included