Semi-fixed cost

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A semi-fixed cost is where the cost is fixed within limited ranges of activity, but which increases when the level of activity becomes greater than this limited range.

An example of a semi-fixed cost is where extra supervision salaries have to be paid each time an extra shift is worked.

If the total semi-fixed cost were plotted on the y-axis of a graph, with the x-axis being the level of activity, the shape of the cost curve would be a series of steps going up.


See also