When would total costs equal fixed costs ?

In business an economics the composition and behavior of cost of production is expressed using different models. In one such model, which closely reflects the reality of cost behavior in many firms, the total cost of production is divided in two cost components - fixed cost and variable cost. The total cost is equal to fixed cost plus variable cost.

The fixed cost component is called fixed because it remains fixed irrespective of total quantity produced. This cost is incurred for items like rent for the land and building, depreciation, interest, and salary of top management. These cost are related to the production capacity created by the firm rather than the actual production. This fixed cost incurred by a firm remains same irrespective of the extent to which the production capacity is utilized. So it will be same irrespective of whether the production is zero or upto 100% production capacity.

The variable cost is directly proportional to the actual volume of production. If variables cost for one unit of production is x, then for N units of production it will be N times x. The variable costs are incurred for things like direct raw material and direct labour used for production,

From above discussion it becomes clear that a firm's total cost will be equal to fixed cost only when its production is zero, but the firm continues to exist and maintain its productive capacity.

If the firm closes down completely, rather than just stopping production for some period,  then the firm will no longer have any capacity to produce even one unit of product. In such a case the fixed cost will also become zero. The company may have to bear some losses in closing down, but once it is closed down there are no costs of any type incurred.