Asked by Arvind Sethi on Jul 03, 2024
Verified
Within the relevant range of activity, costs:
A) can be estimated with reasonable accuracy.
B) exhibit decreasing marginal cost patterns.
C) exhibit increasing marginal cost patterns.
D) None of the given answers
Marginal Cost
The cost of producing one additional unit of a product or service.
Relevant Range
The range of activity or volume in which the assumptions about fixed costs and variable costs are valid.
- Investigate the impact of activity volume changes in the relevant range on the behavior of costs.
Verified Answer
IL
Isaac LoyalJul 05, 2024
Final Answer :
A
Explanation :
Within the relevant range of activity, costs can be estimated with reasonable accuracy. This is because within this range, the relationship between costs and activity is relatively stable, and past data can be used to predict future costs.
Learning Objectives
- Investigate the impact of activity volume changes in the relevant range on the behavior of costs.