What are semi-variable costs?
These are costs that are partly fixed and partly variable. They are also called mixed costs. At a production level, the variable portion should be added to the fixed portion to get the total semi variable cost at that level. Example: A salesman who has a contract with the firm to get a certain minimum wage per month (Fixed Portion) plus a commission (Variable Portion). • How do direct costs differ from indirect costs? In apportioning total costs to various departments of the firm, a cost that can be directly traced to specific departments is a direct cost. Let us assume that there is an electricity meter in each department, and by merely reading each department’s meter each month, we can get the amount of electricity each department has used. An indirect cost is one that cannot be directly apportioned to the various departments because there is no direct way of determining how much of the total cost should be charged to each. An example would be rent expense. Let us say the total rent
