Asked by Tareq Hamad on May 02, 2024
Verified
The relevant range concept is applicable to mixed costs.
Relevant Range
The range of activity within which the assumptions about fixed and variable costs are valid for a specific business.
Mixed Costs
Expenses that have both fixed and variable components, changing with the level of production or sales activity but not in direct proportion.
- Comprehend the notion of the relevant range and its utilization in cost analysis.
Verified Answer
ZK
Zybrea KnightMay 05, 2024
Final Answer :
True
Explanation :
The relevant range concept is particularly relevant to mixed costs, which contain both variable and fixed components. The relevant range represents the level of activity over which cost behavior patterns are expected to remain the same, and outside of this range, the behavior may change due to capacity constraints or shifts in cost structure.
Learning Objectives
- Comprehend the notion of the relevant range and its utilization in cost analysis.
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