Semi-variable, mixed, or semi-fixed costs are:

Semi-variable, mixed, or semi-fixed costs are:

• A. Costs fixed entirely regardless of activity.
• B. Costs that vary directly with output.
• C. Costs that have both fixed and variable components, changing with activity level.
• D. Costs that are never fixed and vary unpredictably with activity.

Answer: (C)

Costs that are semi-variable have both a fixed part and a variable part. The fixed element stays the same regardless of activity, while the variable element changes in proportion to activity. Because of this mix, the total cost rises with activity, but not purely in direct proportion since there’s a constant base to cover. A phone bill is a good example: a fixed monthly line rental plus charges for usage. Another example is maintenance that has a regular contract fee plus costs for any extra work. The other descriptions describe purely fixed costs, purely variable costs, or costs that vary without any fixed base, which doesn’t capture the two-component structure of semi-variable costs.

Costs that are semi-variable have both a fixed part and a variable part. The fixed element stays the same regardless of activity, while the variable element changes in proportion to activity. Because of this mix, the total cost rises with activity, but not purely in direct proportion since there’s a constant base to cover. A phone bill is a good example: a fixed monthly line rental plus charges for usage. Another example is maintenance that has a regular contract fee plus costs for any extra work. The other descriptions describe purely fixed costs, purely variable costs, or costs that vary without any fixed base, which doesn’t capture the two-component structure of semi-variable costs.