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A semi-fixed cost is fixed over a given, small range of activity, and above that level of activity, the cost
suddenly jumps. It stays fixed again for a while at the higher range of activity, and when the activity moves
out of that range, it jumps again. A semi-fixed cost moves upward in a step fashion, staying at a certain level
over a small range and then moving to the next level quickly. All fixed costs behave this way, and a wholly
fixed cost is also fixed only as long as activity remains within the relevant range. However, a semi-fixed cost
is fixed over a smaller range than the relevant range of a wholly fixed cost. An example of a semi-fixed cost is
the nursing staff in a hospital. If the hospital needs one nurse for every 25 patients, then each time the
patient load increases by 25 patients, one additional nurse will be hired and total nursing salaries will jump by
the additional nurse's salary. That is in contrast to administrative staff salaries at the same hospital, which
might remain fixed until the patient load increases by 250 patients, at which point an additional admitting
clerk would be needed. The administrative staff salaries are wholly fixed costs (over the relevant range),
whereas the nursing staff salaries are semi-fixed costs.
What else can I help you with?
If average cost increases does marginal cost increase?
It depends if the increase in Average Cost is caused by an increase in Fixed Costs or an increase in Variable Costs. An increase in Fixed Costs will not increase MC, because FCs do not vary with output (by definition) And increase in Variable Costs will increase MC
What does fixed costs means?
what does fixed costs mean
Why are Fixed costs also called capacity costs?
Fixed costs are considered capacity costs because if a company expands, fixed costs will change. Additionally, if a company adds more resources, fixed costs will change.
Variable costs are relevant and fixed costs are irrelevant?
Generally variable costs are relevant costs but if due to any decision fixed costs are also going to affected then fixed costs are also relevant costs.
Is fixed costs is a period costs?
Yes normally fixed costs are period costs because these costs have to be paid no matter production done or not.
What happens to sales when fixed costs decrease?
When fixed costs decrease, what does this do for sales?
Can a fixed cost be changed?
A fixed cost, by definition, remains constant regardless of the level of production or sales within a certain range. However, over the long term, fixed costs can change due to various factors such as changes in lease agreements, property taxes, or long-term contracts. For example, if a business renegotiates a lease or expands its facilities, those fixed costs can be adjusted. Thus, while fixed costs are stable in the short term, they can change in the long run.
Fixed costs are those costs which are?
Fixed costs are assigned to all products. Variable costs are assigned only to the product that led to the cost.
Why are committed fixed costs the most difficult of fixed costs to change?
Some committed fixed costs are the most difficult of fixed costs to change because they are required to maintain basic operations. For example, rent is a fixed cost that is difficult to change because it is bound by a lease.
Why does e commerce reduce fixed costs?
E-commerce reduces fixed costs because it eliminates or reduces many fixed costs such as location, employees and insurance.
Why does e-commerce reduce fixed costs?
E-commerce reduces fixed costs because it eliminates or reduces many fixed costs such as location, employees and insurance.
What are some examples of committed fixed costs?
leasing costs, committed costs are fixed costs that are caused by the possession of facilities, materials, etc.
