semi-variable cost

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An item of expenditure that contains both a fixed-cost element and a variable-cost element. Consequently, when activity is zero, the fixed cost will still continue to be incurred. For example, in the UK the cost of gas is made up of a standing charge plus a cost per unit consumed; therefore while the consumption of gas varies with production the fixed standing charge will still be incurred when production is zero.

Subjects: Accounting.

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