ACCA Applied Knowledge · Management Accounting · Accounting for management
Which of the following is an example of a cost that is semi-variable?
A telephone bill with a fixed line rental plus a per-minute call charge is semi-variable because it combines a fixed component with a component that varies with usage. Depreciation and salary are fixed, while materials at a constant unit price are fully variable.
- AA telephone bill with a fixed line rental plus a charge per call minuteCorrect
- BStraight-line depreciation of a machine
- CRaw materials purchased at a constant price per kilogram
- DA production manager's annual salary
Explanation
A semi-variable (mixed) cost has a fixed element and a variable element. A line rental plus per-minute charge fits exactly. Straight-line depreciation and a salary are fixed, and materials at a constant price per kg are purely variable.
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