They are costs that involve an element of both fixed and variable costs eg a telephone bill involves line rental (fixed) plus cost for calls made (variable)
An example of semi variable direct costs is wages. Since semi variable costs are partially fixed and variable, regular labor is fixed costs, as production rises and workers have overtime the overtime is considered the variable cost.
Yes generally direct costs are variable costs but there may be some direct costs which can be fixed costs as well.
a semi fixed cost moves upward in a step where semi variable cost begining at a given base level
Semi-variable costs, as we all know, are costs that both has a fixed and variable costs in it. Semi-variable costs though vary in any way, in does not move in direct proportion with sales and/or any productive activity. The fixed portion of these types of expenses can readily be established/identified, but the variable portion gives us all the burden, since it's the variable portion that requires attention. In preparing a budget, we may take into consideration the movement of the variable portion of these expenses and consider in your re-calculation the actual market price movement and the consumprion or usage to come out with a more reasonable figure.
All variable costs are those costs which vary with the variation in the volume of production as well as direct costs are those costs which are directly attributable to any specific unit of product so it may be accepted that all direct costs are variable costs but fixed costs may also be direct cost.
An example of semi variable direct costs is wages. Since semi variable costs are partially fixed and variable, regular labor is fixed costs, as production rises and workers have overtime the overtime is considered the variable cost.
If direct labor don't change with number of units product then it is fixed cost but if it changes with the change in production units then it Is variable cost.
Yes generally direct costs are variable costs but there may be some direct costs which can be fixed costs as well.
a semi fixed cost moves upward in a step where semi variable cost begining at a given base level
Semi-variable costs, as we all know, are costs that both has a fixed and variable costs in it. Semi-variable costs though vary in any way, in does not move in direct proportion with sales and/or any productive activity. The fixed portion of these types of expenses can readily be established/identified, but the variable portion gives us all the burden, since it's the variable portion that requires attention. In preparing a budget, we may take into consideration the movement of the variable portion of these expenses and consider in your re-calculation the actual market price movement and the consumprion or usage to come out with a more reasonable figure.
All variable costs are those costs which vary with the variation in the volume of production as well as direct costs are those costs which are directly attributable to any specific unit of product so it may be accepted that all direct costs are variable costs but fixed costs may also be direct cost.
Direct Cost are those costs that can be directly assigned to a production process. Indirect cost were those costs that cannot be directly assigned to production process but have to allocate to production. Variable costs are those costs that vary directly with the production level. Only Direct cost could be variable . But not all direct cost are variable. Thus direct cost contains both Variable and Fixed elements while indirect costs contains only fixed element.
No. Total cost includes fixed costs, too. Even Semi Variable costs include Fixed costs...??? So whats the difference?
Direct labor is variable cost as it varies with the change in level of production of units.
assignment
Direct Cost are those costs that can be directly assigned to a production process. Indirect cost were those costs that cannot be directly assigned to production process but have to allocate to production. Variable costs are those costs that vary directly with the production level. Only Direct cost could be variable . But not all direct cost are variable. Thus direct cost contains both Variable and Fixed elements while indirect costs contains only fixed element.
If direct material and direct labor remains fixed irrespective of production volume then these are fixed costs otherwise these are variable costs and normally these are variable costs because it varies with the production volume.