Asked by Kimberly Valencia-Franco on Jun 10, 2024
Verified
The range of activity over which changes in cost are of interest to management is called the relevant range.
Relevant Range
The range of activity within which assumptions about variable and fixed cost behavior are valid.
Cost
A sacrifice made to obtain some benefit.
Activity
In accounting and finance, it typically refers to the level of business operations or transactions in a given period.
- Comprehend the importance of the relevant range in cost analysis.
Verified Answer
MA
Mariam ArshadJun 16, 2024
Final Answer :
True
Explanation :
The relevant range is the range of activity over which changes in cost are of interest to management. Beyond the relevant range, fixed costs may change and variable costs may stabilize, making cost behavior unpredictable.
Learning Objectives
- Comprehend the importance of the relevant range in cost analysis.
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