When the activity level declines within the relevant range, what should happen with respect to the following?
A)Option A
B)Option B
C)Option C
D)Option D

Question

When the activity level declines within the relevant range, what should happen with respect to the following? 
A)Option A 
B)Option B 
C)Option C 
D)Option D

Quizplus · Accepted Answer

Option C suggests that costs will remain constant in the relevant range regardless of the activity level. This is the most appropriate choice as it corresponds to the behavior of fixed costs, which do not vary with changes in activity level within the relevant range. Option A and B suggest that costs will increase or decrease with changes in activity level, which is more characteristic of variable costs. Option D suggests that costs will remain fixed at all activity levels, which is not consistent with cost behavior in the relevant range.

When the Activity Level Declines Within the Relevant Range, What