As a firm begins to operate outside the relevant range,the accuracy of cost estimates for fixed and variable costs:
Fixed
Variable
A) Increase
Increase
B) Increase
Decrease
C) Decrease
Decrease
D) Do not change

Question

Quizplus · Accepted Answer

As a firm begins to operate outside the relevant range, the accuracy of cost estimates for fixed and variable costs decreases. This is because fixed costs may not remain constant due to capacity limitations or changes in technology, while variable costs may not vary proportionately. Therefore, cost estimates become less reliable outside the relevant range.

As a Firm Begins to Operate Outside the Relevant Range,the