Fixed costs
In one sentenceCosts whose total does not change with the level of activity in the short term, such as rent, management salaries and insurance, while the share per unit falls as production rises.
Simply put
You pay the full shop rent whether you sell 10 pieces or 10,000. So its total is fixed, but each piece's share of it falls as sales rise.
“Fixed” does not mean it never changes: rent may rise on renewal, and opening a new branch adds new fixed costs.
Worked example
A small factory pays monthly rent of 20,000 SAR.
Producing 1,000 units: 20,000 ÷ 1,00020 SAR per unit
Producing 2,000 units: 20,000 ÷ 2,00010 SAR per unit
Total rent in both cases20,000 SAR
Don't confuse it with
Variable costsVariable costs change in total with quantity while the share per unit stays roughly constant, the exact opposite.