The relevant range is the range of output which the assumed cost relationship is valid for the normal operations of the firm.

Question

Quizplus · Accepted Answer

The statement is true. The relevant range is the range of output where the cost behavior assumptions hold true for normal operations of the firm. Beyond this range, the assumptions may not hold as the cost behavior may change due to factors such as capacity constraints, inefficiencies, or other factors. Identifying the relevant range of cost-volume relationships is important for effective cost management and decision-making.

The Relevant Range Is the Range of Output Which the Assumed