The relevant range is the limit of cost-driver level within which a specific relationship between costs and the cost driver is valid.

Question

Quizplus · Accepted Answer

The statement correctly defines the term "relevant range". The relevant range is the range of cost driver levels over which the relationship between costs and the cost driver is linear and stable. Beyond this range, the relationship may become unpredictable or non-linear, and therefore, the cost behavior may change. It is essential to identify the relevant range to make accurate cost predictions and decisions.

The Relevant Range Is the Limit of Cost-Driver Level Within