Identify all costs that do not change with production or sales volume
Collect expense records for a relevant period
Separate fixed costs from variable costs
Add up expenses such as rent, salaries, insurance, depreciation, and loan payments
Exclude costs that rise or fall with output, such as raw materials and shipping
Use the formula: Fixed Cost = Total Cost – Variable Cost
Check costs at zero production level if available
Review contracts and recurring obligations for fixed payments
Verify the total by comparing across multiple accounting periods