What do you mean by Semi-Fixed cost? Give an example?

Semi-fixed cost (also called semi-variable cost or mixed cost) is a cost which varies but not in direct proportion to changes in the volume of production. It is a combination of fixed and variable components — partly fixed and partly variable.

The fixed component represents the cost of providing capacity, and the variable component is caused by the actual use of that capacity. Semi-fixed costs are neither perfectly fixed nor absolutely variable.

Example: Telephone bill — the monthly rent of the telephone connection is a fixed cost whereas the charges for the calls actually made during the month are a variable cost. The total bill thus has both a fixed and a variable element, making it semi-fixed.