The term "relevant range" means the range within which:
A) costs may fluctuate.
B) a particular cost formula is valid.
C) production may vary.
D) relevant costs are incurred.

Question

Quizplus · Accepted Answer

The term "relevant range" refers to the range of activity within which the assumptions made about the cost behavior are reasonably valid. In other words, it is the range where a particular cost formula is applicable. Beyond this range, the formula may not reflect the cost behavior accurately. Therefore, option B is the correct choice. Options A and C are not correct because they do not describe the concept of relevant range precisely. Option D is partially correct, but it is not complete, as relevant costs could be incurred both within and outside the relevant range.

The Term "Relevant Range" Means the Range Within Which