The relevant range is the range of output within which the assumed cost relationship is valid for the normal operations of the firm.

Question

Quizplus · Accepted Answer

The statement is true. The relevant range is the range of output levels within which the assumptions made about cost behavior are valid for the normal operations of the firm. Outside this range, the cost relationship may change due to factors such as capacity constraints, changes in operating conditions, or other factors that affect the fixed and variable cost components. Therefore, it is important to identify the relevant range of output levels when analyzing cost behavior and making business decisions.

The Relevant Range Is the Range of Output Within Which