Identify and analyse the cost behaviour of fixed, variable, semi-variable and stepped

Fixed costs: Those costs which in the short run do not change with the level of activity in the business.
Classic examples would be rent and business rates. (also commonly known as indirect costs)

Variable costs: Those costs which vary directly with the level of operations in the business.
Classic examples would be raw materials and hourly paid labour. (also commonly known as direct costs)

Semi variable costs have an element of both of the above. Take for example:

The fixed cost is the monthly line rental (£16.99). I have to pay this even if I am holiday.

The variable cost would be the cost of each individual call (£0.05). I don't have to pay for these if I am on holiday.

Stepped costs:

If your business decided to rent an additional shop unit can you see how your fixed costs will 'step up'.