Not exactly. Suppose you have a machine that costs $100,000 a year. That pays its debt service and other fixed costs. And the machine can make 100,000 widgets a year. If the machine just sits there, doing nothing, it'll cost $100,000 a year. If it's operating, though, there will be other costs associated with the machinery--repairs, maintenance, etc. So at full production, that machine might cost $150,000 a year. And suppose next year the company needs to make 110,000 widgets. It'll have to buy or lease a new machine, since the original machine has a maximum capacity of 100,000 widgets a year. So while the costs won't rise above $150,000 for the original machine, the company's total machinery costs will rise. Hope that helps.
