A fixed cost represents a business expense that does not vary in accordance with the levels of production and sales. Such costs are not dependent on the activity levels and must be sustainably paid regardless of the rate of production (output) being zero. Some of them include rent, salaries of permanent staff and insurance. Since fixed costs form an integral part of the budget, they are of importance in determining the break-even point of a business. Compared to the variable costs which vary with production, fixed costs are predictable and helps in long term planning and analysis.