Relevant range is defined as:
A)The proportion of total costs that are fixed and variable.
B)A statistical method that uses the normal range of operations to estimate fixed and variable costs.
C)A non-statistical method that uses the normal range of operations to estimate fixed and variable costs.
D)A firm's normal range of operations in which we expect a stable relation between activity and cost.
E)None of the above.

Question

Quizplus · Accepted Answer

Relevant range is the normal range of operations in which we expect a stable relationship between activity and cost. It is the range of activity levels over which a company expects to operate and typically experiences a stable level of efficiency and productivity. This range is important for budgeting and planning purposes as costs may vary outside of this range. Option A is incorrect as relevant range is not just limited to fixed and variable costs. Option B and C are incorrect as relevant range is not a statistical method.

Relevant Range Is Defined As