Write the meaning of semi variable overhead?


Question: Write the meaning of semi variable overhead?

Semi-variable overhead, also known as semi-fixed overhead, is a type of manufacturing overhead that includes both fixed and variable components. 


In other words, semi-variable overhead costs are those costs that include both fixed costs that remain constant regardless of the level of production or activity and variable costs that increase or decrease based on the level of production or activity. 


For example, the cost of maintaining a factory building may include both a fixed component, such as property taxes and insurance, and a variable component, such as maintenance and repair costs that may increase with the level of production. 


Understanding the components of semi-variable overhead is important for businesses to accurately estimate their total manufacturing costs and determine the most cost-effective production levels.

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