Variable Cost vs Semi Variable Cost

Variable cost and semi variable cost are the part of total cost but there are lots of differences which should know cost accountant for deep cost analysis. Here, we give its list.

Date of Asking Question
2/7/2014 5:54


Question Title

Question Detail
How we can get difference between semi variable cost and variable cost


Solution Category

Solution : 

Following are the main differences between variable cost and semi variable cost.

1. Definition 

Variable Cost : In cost accounting, variable cost are those cost which change due to change in the production or sales or any other activities. 

Semi Variable Cost : If any cost have both fixed cost and variable cost features, then it will be semi variable cost. 

2.  Examples

Variable Cost : Expenses of raw material, Electricity expenses, labor cost on production, commission on sale.

Semi Variable Cost : 

a) We can give the example of electricity cost. Up to some limit, we have to pay the bill whether we consume electricity or not after some limit, cost will be on the basis of unit consumed. 

b) We can also give the example of salesman's earning. Salesman gets a fixed salary. He also gets commission on sales. 

c) We can also give the example of dish tv connection. You have to pay monthly fixed charges but if you see extra movie which is not in your monthly plan, you have to pay per extra movie. 

3. Segregation

Variable Cost : We can not segregate the variable cost into semi-variable and fixed cost.

Semi-variable Cost : We can easily segregate the semi variable cost into variable cost and fixed cost. 

4. Importance

Variable Cost : If any company see, it will increase the total sale. company can change any fixed cost as variable cost. For example, many private electricity are using per unit cost instead per month fixed cost of electricity. Customers will happy with this project and only pays when they use electricity. It will be useful when electricity company face the competition from solar electricity companies.

Semi Variable Cost : To consider semi-variable cost is helpful for better profitability planning. If any company thinks, only fixed cost is decreasing its profitability, it will convert fixed cost model to customer into semi-variable cost model.






access account accountant Accounting accounting definitions accounting ebook Accounting education accounting procedure accounting process outsourcing Accounting Software advance advertising africa Amalgamation amendments announcements Annuity assets audit auditing Australia B.Com. balance sheet bank Bank reconciliation banking basic accounting BBA benefits best bill black money blog bloggers book keeping bookkeeping Branch Accounting - full tutorial budget Budget variance business businessman CA calculator canada capital capital budgeting career cash cash book cash flow statement Chiense children china class coaching coins college commerce commerce students company computer computer accounting conference Contact vinod kumar Control Your Spending corporate accounting cost cost accounting cost center cost centre CPA credit credit card cs currency data Debit and credit debit cards debt debtor degree depletion depreciation Diwali Messages documents dollar domain Downloads Dubai e-accounting earning education Education Loans email employee EPF ERP euromoney examination excel excise duty expenses facebook factor of loan fans feature fifo FII fiji finacle finance Financial financial accounting fire insurance flickr flow forensic forex formula france fraud free fun function fund GAAP GDP gdr germany gold goodwill goodwill accounting google google apps Google Adsense google apps google base google buzz google calendar Google docs google finance google fusion tables google talk govt. GST guide health Hindi Hindi Language history holding company How to treat FBT in Tally 9 HRA ICAI ICAWI ICICI Bank IFRS income income statement Income Tax India indian railway Indonesia inflation inflation accounting infographics information inspiration insurance insurance accounting Intangible interest international Internet Introduction of Tally 9 inventory investment investment in Shares invoice IT Japan Job costing journal entries Journal Entries eBook Help Kalculate keyboard kindle kuwait laptop law LBT learning lease lecture ledger leducation Leverage Analysis liabilities lifo linkedin loan logical point loss loss of profit M.Com. m.phil malaysia management accounting manual accounting manufacturing account market marketing mastercard material MBA MCA media migration mobile money ms word ms. excel multi currency in tally 9 Multicurrency Accounting mutual fund national security new and sacrifice ratio new york times new zealand news NGO nonprofit-accounting North Georgia Mountains NPV NSE odbc office oman online application online accounting Online Accounting Course otcei pakistan parents Partnership pay pal pdf Personal Finance pie chart pie chart of income pnb podcast ppf presentation price privacy policy prize money prof. vinod kumar profit profit and loss account project management provision purchase puzzles quickbooks Quote quotes quotes of svtuition rating agency ratio analysis RBI readers real estate rectification of errors remote control reports reserves responsibility accounting retirement revenue Revenue reserves review risk rupees salary sale saudi arabia saving sbi scholarship school SEBI security service tax share share trading Shares shri lanka singapore sms social accounting society solution South Africa stock stock exchange structure student students study subsidiary company svtuition swiss bank tally tally 9 Tally 7.2 Tally 9 Tally.ERP 9 tanzania tax Tax Accounting TDS teacher teaching technology test testimonial testimonials thailand tips trading trading on equity transaction trend trial balance truthfulness tuition twitter UAE UGC - NET Commerce UK United Arab Emirates university usa valuation VAT Video Voucher and vouching Wealth wikipedia working capital youtube
Accounting Education: Variable Cost vs Semi Variable Cost
Variable Cost vs Semi Variable Cost
Accounting Education
Not found any lecture VIEW ALL Continue reading Reply Cancel reply Delete By Home PAGES Lectures View All RECOMMENDED FOR YOU Category ARCHIVE SEARCH ALL Lectures Not found any lecture match with your request, please help to write it and send it to our email at for making this website free accounting and finance encyclopedia. Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS CONTENT IS PREMIUM Please share to unlock