The relevant range is useful for analyzing cost behavior for management decision-making purposes.

Question

Quizplus · Accepted Answer

The relevant range is the range of activity over which we expect our assumptions about cost behavior to hold true. It is important for management to understand this range in order to make accurate cost predictions and determine the most effective course of action. Outside of the relevant range, cost behavior may change, making past assumptions invalid and leading to inaccurate predictions.

The Relevant Range Is Useful for Analyzing Cost Behavior for Management