Semi-Variable Cost

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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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Mixed costs have both fixed and variable elements (also called semi-variable costs).
For example, the advocates of variable costing and contribution reporting believe that keeping distinctions among variable, fixed, and semi-variable costs helps the focus on causal relationships.
On the production time basis, the direct material costs would be fixed as the order size is fixed, whereas on the production quantity basis the material costs would still be a variable cost and maintenance costs would tend to be a semi-variable cost on the time based system.