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Paul Tracy

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Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 2 million monthly readers. While there, Paul authored and edited thousands of financial research briefs, was published on Nasdaq. com, Yahoo Finance, and dozens of other prominent media outlets, and appeared as a guest expert at prominent radio shows and i...

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Updated August 29, 2020

What is a Semi-Variable Cost?

A semi-variable cost has characteristics of both fixed costs and variable costs once a specific level of output is surpassed.

How Does a Semi-Variable Cost Work?

Semi-variable costs remain fixed up to a particular production volume. Beyond this volume, semi-variable costs increase in direct proportion to output. Wages, for instance, are semi-variable costs which multiply by 1.5 beyond 40 hours worked in a given week (also called time-and-a-half).

Why Does a Semi-Variable Cost Matter?

Semi-variable costs are an important consideration for companies when planning output levels, because semi-variable costs may limit profitability at higher production levels and erode a company's bottom line.

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