Question

There are certain costs which are neither fixed nor variable. Justify

Answer 1

Based on variability, the costs has been classified into three categories, they are fixed, variable and semi variable. Fixed costs, as its name suggests, is fixed in total i.e. irrespective of the number of output produced. Variable costs vary with the number of output produced. Semi-variableis the type of costs, which have the characteristics of both fixed costs and variable costs.

Many cost accounting students, are not able to bifurcate fixed and variable cost. Fixed costs are one that do not change with the change in activty level in the short run. Conversely, Variable cost refers to the cost of elements, which tends to change with the change in level of activity. While working on costs of production, one should know the difference between fixed cost and variable cost. So, take a read of the given article in which we have compiled all the important points of distinction in tabular form along with examples.

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Answer 2

Answer:

Semi-variable is the kind of costs, that have the traits of each fixed charges and variable charges.

Explanation:

The term cost refers to any rate that a enterprise incurs throughout the producing or manufacturing process for its items and services. Put simply, it's far the value of money agencies spend on shopping and promoting items. Businesses incur two foremost forms of charges once they produce their items—variable and fixed charges.

Variable charges are any costs that alternate primarily based totally on how much a enterprise produces and sells. This approach that variable charges increase as manufacturing rises and reduce as manufacturing falls. Some of the most not unusualplace forms of variable charges consist of labor, software costs, commissions, and uncooked materials.

Fixed charges, on the opposite hand, are any costs that stay the equal regardless of how an awful lot a enterprise produces. These charges are commonly unbiased of a enterprise's unique enterprise sports and consist of such things as rent, assets tax, insurance, and depreciation.