Defining Semi-Variable Costs

Steps:

• Recall semi-variable costs include a fixed portion (unchanged by output) and a variable portion (changes with output).
• Evaluate statement 1: "Part changes for any level" implies change regardless of output variation, which misrepresents the fixed component.
• Evaluate statement 2: "Part always changes for a given level" accurately describes the variable portion responding to output.
• Evaluate statement 3: "Amount always changes" ignores the fixed portion that remains constant.

Why D is correct:

• Semi-variable costs follow the formula: Total = Fixed + (Variable rate × Output), so only part (variable) changes with output, matching statement 2.

Why the others are wrong:

• A includes 1, which wrongly suggests change without output variation.
• B includes 1 and 3, both overlooking the fixed element.
• C includes 3, which falsely claims the entire cost varies.

Final answer: D