ECONOMICS

Detailed explanation-1: -There is a fixed rental for telephone whether you make any call or not. After the free calling limit, there will be charge per call. Therefore, telephone expenses are called as semi variable expenses.

Detailed explanation-2: -Telephone expenses are another example of a semi-variable cost. Regardless of usage, a customer still receives a fixed charge each month for basic phone service. As long-distance usage increases, costs increase.

Detailed explanation-3: -Telephone as a Utilities Expense This would include any costs associated with the phone itself, as well as any monthly service fees. This would be a reasonable categorization for a business that uses the telephone primarily for personal purposes.

Detailed explanation-4: -A telephone bill, which includes a monthly base rate plus an extra fee for each minute of long-distance service, is an example of a variable cost.

Detailed explanation-5: -Electricity is a good example of a semi-variable cost. The base rate for service may be constant, but as production grows, power consumption and the company’s electricity bills go up. In other words, there is both a fixed and variable aspect to semi-variable costs.