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Help to solve cost is classified as being semi-variable

Iicon10y ago
A particular cost is classified as being semi-variable. What is the effect on the TOTAL COST if activity increases by 20%? A.stay the same B.decreases by less than 20% C.increases by 20% D.increases by less than 20%
CCindy10y ago#1
Assume the cost and calculate according to the increase or decrease of percentage Activity level : 100 Variable per unit : $2 Fixed : $500 Total : $700 Now do another set which activity level increase by 20% Activity level : 120 Variable per unit : $2 Fixed : $500 Total : $740 Then find the difference in total cost in %
Mmansoor10y ago#2
semi variable cost have a fixed part and a variable part. this means semi variable costs rise more sloly than variable costs. therefore the costs will rise but not as fast as 20%
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