The relevant range concept is not applicable to mixed costs.

Question

Quizplus · Accepted Answer

The relevant range concept is applicable to mixed costs because it refers to the range of activity within which the fixed and variable components of a mixed cost remain constant. As activity levels increase or decrease outside of the relevant range, the proportion of fixed and variable costs may change and the cost behavior may no longer be accurately represented by a mixed cost formula.

The Relevant Range Concept Is Not Applicable to Mixed Costs