Semi-Variable Cost

AAA

DEFINITION of 'Semi-Variable Cost'

A cost composed of a mixture of fixed and variable components. Costs are fixed for a set level of production or consumption, becoming variable after the level is exceeded.

Also known as a "semi-fixed cost."

INVESTOPEDIA EXPLAINS 'Semi-Variable Cost'

This type of cost is variable in the sense that greater levels of production increase total cost. If no production occurs, then a fixed cost is still incurred.

Labor costs in a factory are semi-variable. The fixed portion is the wage paid to workers for their regular hours. The variable portion is the overtime pay they receive when they exceed their regular hours.

RELATED TERMS
  1. Variable Cost-Plus Pricing

    A pricing method in which the selling price is established by ...
  2. High-Low Method

    In cost accounting, a way of attempting to separate out fixed ...
  3. Variable Cost

    A corporate expense that varies with production output. Variable ...
  4. Fixed Cost

    A cost that does not change with an increase or decrease in the ...
  5. Operating Margin

    A ratio used to measure a company's pricing strategy and operating ...
  6. Account Analysis

    1. In cost accounting, this is a way for an accountant to analyze ...
Related Articles
  1. A Look At Corporate Profit Margins
    Markets

    A Look At Corporate Profit Margins

  2. Understanding The Income Statement
    Forex Education

    Understanding The Income Statement

  3. Introduction To Fundamental Analysis
    Markets

    Introduction To Fundamental Analysis

  4. Advanced Financial Statement Analysis
    Options & Futures

    Advanced Financial Statement Analysis

comments powered by Disqus
Hot Definitions
  1. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  2. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  3. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  4. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  5. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
  6. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
Trading Center