Skip to content

ACCA Applied Skills · Performance Management · Analytical techniques in budgeting and forecasting

Which of the following best describes a semi-variable cost?

A semi-variable cost has both a fixed component, incurred regardless of activity, and a variable component that changes with the level of activity. A telephone bill with rental plus call charges is a typical example.

  1. AA cost with a fixed element plus a variable element that changes with activityCorrect
  2. BA cost that stays constant in total across all activity levels
  3. CA cost that rises in steps once capacity thresholds are exceeded
  4. DA cost that varies in direct proportion to activity with no fixed element

Explanation

A semi-variable (mixed) cost contains both a fixed component and a variable component, such as a telephone bill with line rental plus call charges. A step cost rises in lumps, a fixed cost is constant, and a variable cost is proportional to activity.

Did you get it right without looking?

One question tells you little. A timed set on Analytical techniques in budgeting and forecasting shows your real accuracy, how long you take and where you lose marks.

Practise Analytical techniques in budgeting and forecastingFree diagnostic mock

More Analytical techniques in budgeting and forecasting questions