Semi-variable costs, also known as mixed costs, are expenses that contain both a fixed component and a variable component. This means that there is a base level of cost that remains constant regardless of production or sales volume, along with an additional variable component that increases or decreases with changes in production levels. Typical examples of semi-variable costs include utility bills, where a minimum charge applies (fixed) in addition to charges that vary based on usage (variable). Understanding these costs is crucial for effective budgeting and financial planning in a business context.