semivariable overheadsany OVERHEADS that are partly FIXED OVERHEADS and partly VARIABLE OVERHEADS with respect to output, so that they vary roughly with output but not in exact proportion to it. They include such items as electricity and telephone costs which combine a fixed quarterly payment with a charge per unit consumed. In arithmetic terms, semivariable costs (S) can be represented as:
where F is the fixed cost element, V is variable cost per unit and Q is output.
To facilitate cost analysis, semi-variable overhead costs are often broken down into their fixed and variable parts, leaving only two categories of cost:
Variable Costs = direct materials + direct labour + variable overheads + variable component of semivariable overheads.
Fixed Costs = fixed overhead + fixed element of semivariable overheads.
This allows accountants to represent the behaviour of costs graphically by straight lines using BREAK-EVEN ANALYSIS.