Semi-Fixed
Expenses are those expenses that are not directly linked to the number
of vehicles that you conduct.
They represent those expenses that you have
to pay to keep the Bodyshop running whether you sell anything or not.
A
good example here is non-productive salaries. If you do not sell
anything, you still have to pay the Receptionist, Administrator and Bodyshop Manager.
Typically,
Semi-Fixed expenses are shown as a monetary value and in order for you
to capture meaningful trend analysis you will need to express them as a
percentage of Departmental Turnover.
Example:
A) Semi-Fixed Expenses = R143,272 B) Total Turnover = R573,088 C) Semi-Fixed Expense % = 25% (A ÷ B X 100)
Discussion:
The
reason that they are called Semi-Fixed is that they are fixed each
month irrespective of sales volume, but the Directors of the business
decide at what value those expenses are fixed.
The important thing to note here is that these expenses are not linked to sales volume.