Additional fixed costs are fixed costs incurred during the production process to increase production or start a new business. The new fixed cost does not change with the change in business volume, so it is a relatively fixed cost.
1.Determine the nature of the fixed costs: The first thing you need to do is determine which costs are fixed and don't change with production volumes. For example, plant rent, equipment depreciation, employee salaries, etc., may all be considered fixed costs.
2.Determine the size of new production or new business: Identify additional fixed costs incurred as a result of increasing production or starting a new business. For example, if a company plans to expand its production and needs to add equipment or expand the plant area, then these additional fixed costs need to be calculated.
3.Calculate the new fixed costs: The new fixed cost is calculated based on the nature of the fixed cost and the new production volume or the size of the new business. For example, if the company plans to add 100 new products, and each product needs to add 10 yuan in fixed costs, then the total new fixed cost is 1,000 yuan.
Let's say a company produces a product and the current annual production is 100,000 pieces. The company's fixed costs include: material cost of 20 yuan per product, labor cost of 10 yuan, equipment depreciation cost of 5 yuan, and plant rent of 2 yuan. If the company plans to expand its annual production to 150,000 pieces, the additional production will be 50,000 pieces. Based on the above method of calculating the fixed costs, we can derive:
a.New material cost: 50,000 pieces x 20 yuan = 1 million yuan.
b.New labor cost: 50,000 pieces x 10 yuan = 500,000 yuan.
c.Depreciation cost of new equipment: 50,000 pieces x 5 yuan = 250,000 yuan.
d.Rent of new factory building: 50,000 pieces x 2 yuan = 100,000 yuan.
Therefore, the new fixed cost is: 1 million yuan + 500,000 yuan + 250,000 yuan + 100,000 yuan = 1.85 million yuan. It is important to note that this is just a simple example, and the calculation of the new fixed cost may be more complex in practice.