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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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 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%.
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.