An increase in fixed costs usually indicates _____.
A)cost driver activity is decreasing
B)cost driver activity is increasing
C)relevant range is increasing
D)relevant range is decreasing

Question

Quizplus · Accepted Answer

An increase in fixed costs does not directly relate to cost driver activity levels but can indicate that the relevant range, or the range of activity within which the assumptions about fixed and variable costs are valid, is increasing. This is because a company might incur higher fixed costs to support a higher level of operations or capacity.

An Increase in Fixed Costs Usually Indicates _____