Semi-direct costs is a misleading term because a cost is either direct (traceable to a specific product) or indirect (allocated across multiple products or departments). There is no in-between.
While some costs may appear partially direct, accounting follows a fountain model for allocation—first assigning costs to individual products, then to product groups, and finally distributing remaining costs as indirect. A cost that is not directly caused by a single product but is associated with a product group remains indirect, not semi-direct.
The correct term for costs that behave differently based on production levels is semi-variable costs, which contain both fixed and variable components but are still classified as either direct or indirect.
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