Asked by Brenna McPhee on Jul 02, 2024
Verified
A specific activity range over which the cost changes are of interest
A)Relevant range
B)Break-even point
C)Contribution margin
D)Fixed costs
E)Variable costs
Relevant Range
The range of activity within which assumptions made about cost behavior are valid. Beyond this range, fixed and variable cost patterns may change.
Break-even Point
The level of sales or production at which total revenues equal total costs, resulting in neither profit nor loss.
Contribution Margin
The selling price of a product minus the variable cost per unit, used to cover fixed costs and contribute to net profit.
- Understand the concept of the relevant range and its impact on cost behavior.
Verified Answer
EV
emilie viviani7 days ago
Final Answer :
a
Explanation :
The relevant range refers to a specific activity range over which the cost changes are of interest. It is the range of output or sales volume over which the assumptions about the behavior of costs are valid.
Answer: B
The break-even point is the level of sales at which total revenue equals total costs, and there is no profit or loss. It is the point at which a company's sales revenue equals its total fixed and variable costs.
Answer: C
Contribution margin is the amount by which sales revenue exceeds variable costs. It is the amount of money a company has left over after deducting all variable costs from its revenue.
Answer: D
Fixed costs are expenses that do not change based on the level of production or sales volume. Examples include rent, salaries, and insurance premiums.
Answer: E
Variable costs are expenses that change based on the level of production or sales volume. Examples include raw materials, direct labor, and sales commissions.
Answer: B
The break-even point is the level of sales at which total revenue equals total costs, and there is no profit or loss. It is the point at which a company's sales revenue equals its total fixed and variable costs.
Answer: C
Contribution margin is the amount by which sales revenue exceeds variable costs. It is the amount of money a company has left over after deducting all variable costs from its revenue.
Answer: D
Fixed costs are expenses that do not change based on the level of production or sales volume. Examples include rent, salaries, and insurance premiums.
Answer: E
Variable costs are expenses that change based on the level of production or sales volume. Examples include raw materials, direct labor, and sales commissions.
Learning Objectives
- Understand the concept of the relevant range and its impact on cost behavior.