When predicting costs at different volumes, managers should consider which of the following?
A) The relevant range of the cost
B) The type of cost behaviour
C) Neither of the above
D) Both of the above

Question

Quizplus · Accepted Answer

Managers should consider both the relevant range of the cost and the type of cost behaviour when predicting costs at different volumes. The relevant range refers to the range of output or sales over which the assumption that certain costs will remain constant is reasonable. The type of cost behavior (fixed, variable, semi-variable) will affect how costs change as volume changes, which should also be considered when predicting costs.

When Predicting Costs at Different Volumes, Managers Should Consider Which