Match the following terms with their definitions.
-A specific activity range over which the cost changes are of interest
A)Relevant range
B)Break-even point
C)Contribution margin
D)Fixed costs
E)Variable costs

Question

Quizplus · Accepted Answer

The relevant range refers to a specific activity range over which the cost changes are of interest. It is the range of output or sales volume over which the assumptions about the behavior of costs are valid.

Answer: B
 The break-even point is the level of sales at which total revenue equals total costs, and there is no profit or loss. It is the point at which a company's sales revenue equals its total fixed and variable costs.

Answer: C
 Contribution margin is the amount by which sales revenue exceeds variable costs. It is the amount of money a company has left over after deducting all variable costs from its revenue.

Answer: D 
 Fixed costs are expenses that do not change based on the level of production or sales volume. Examples include rent, salaries, and insurance premiums.

Answer: E
 Variable costs are expenses that change based on the level of production or sales volume. Examples include raw materials, direct labor, and sales commissions.

Match the Following Terms with Their Definitions