The term relevant range as used in cost accounting means the range over which:
A)Costs may fluctuate.
B)Cost relationships are approximately linear.
C)Production may vary.
D)Relevant costs are incurred.

Question

Quizplus · Accepted Answer

The term relevant range in cost accounting refers to the range of activity over which cost behavior is approximately linear. Within this range, the assumptions made about cost behavior in cost accounting are valid. Therefore, costs may fluctuate and production may vary, but the key consideration is that cost relationships are linear within the relevant range. Additionally, relevant costs are incurred within the relevant range, but this is not the defining characteristic of the term.

The Term Relevant Range as Used in Cost Accounting Means