The company that I work for is a public university in Bahrain. While the main building containing classrooms is owned by the company, there are additional classrooms across the street that are rented. This is a local fixed cost, incurred regardless of whether or not they are currently being used. In the summer months when people are usually on vacation or taking a break, rent is still paid even though they remain empty. It is worth it to pay the rent as the company knows there will be plenty of use once the university resumes in September. Were the business to expand, this would be an important fixed cost to consider. That is, the question of renting or buying classroom space would have large implications. 1. Suggest to the management how to manage such fixed costs together with the business