Semi-Variable Cost

(redirected from Semivariable Costs)

Semi-Variable Cost

A cost for an individual or company that consists of a fixed base cost and another cost that changes from time period to time period. For example, suppose one's landlord rolls utility costs together with the rent. One's rent thus becomes a semi-variable cost because one pays the rent (a fixed cost) and the electric, gas, and water bills (variable costs) together with the same check.
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If trade takes place, shipping any of the commodities to another agent incurs semivariable costs of transportation.
Continuing with the example above, as the volume for a test system increases by 10%, the semivariable costs would increase, but not by 10%.
This improvement was offset by lower average unit volumes, which decreased leverage of fixed and semivariable costs.
Due to the existence of fixed and semivariable costs, actual costs do not change in direct proportion to a single cost "driver.