Total fixed costs, also called direct costs, are all the expenses directly associated with a project that you cannot avoid (recurring costs) or allocated in whole or in part to more than one cost object. Total fixed costs are future cash expenditures for rent, utilities, debt service, insurance premiums, etc. Fixed cost does not include operating expenses such as labor, materials, and supplies. For example, an organization might claim 1 million dollars in revenue per year, but $50% or $500 000 is committed to cover overhead/fixed expense items that cannot achieve the goal of generating revenue.