Outside of the relevant range,variable and fixed cost-behavior patterns remain constant.

Question

Quizplus · Accepted Answer

Outside of the relevant range, variable and fixed costs may change their behavior patterns. For example, a fixed cost may become a variable cost if the production level goes beyond the capacity of the existing resources. Similarly, a variable cost may become a fixed cost if a long-term contract is signed with the supplier. Therefore, it is not always true that cost-behavior patterns remain constant outside of the relevant range.

Outside of the Relevant Range,variable and Fixed Cost-Behavior Patterns Remain