However, there could be a breaking point where the test volume increase (to say 40%) would necessitate another supervisory position, which forces an increase in the semivariable cost
Fixed and semivariable cost
structures normally are less than optimal areas to begin with, since they often take longer to affect.
In our opinion, Forward Air's many strengths include the following: a leading position in a large, fragmented, and growing industry; a well-recognized brand; a strong value proposition; leading technology; a seasoned leadership team (averages 20 years); a proven growth formula; no vendor or customer concentration; a semivariable cost
structure; consistent operating margin; strong ROE (27% in 2006) and ROIC (22%); and a solid balance sheet with essentially zero debt and $42.
We also analyzed the effect of this modeling approach for semivariable costs
by including two Air Force cost metrics: Air Force total ownership cost (AFTOC) and logistics cost planning factors costs per flying hour (CPFH).
If trade takes place, shipping any of the commodities to another agent incurs semivariable costs
Due to the existence of fixed and semivariable costs
, actual costs do not change in direct proportion to a single cost "driver.
However by adopting a less restrictive approach than that proposed by Areeda and Turner they have to cope with some very difficult questions involving overhead allocations, and the distinction between variable and semivariable costs
This is because fixed and semivariable costs
are absorbed by a larger volume of dispensed prescriptions.