The relevant range is defined as:
A) The period of time over which costs do not change
B) The volume of production over which the cost assumptions hold
C) The volume of production over which step-wise fixed costs increase
D) The time period in which the level of production does not change

Question

Quizplus · Accepted Answer

The relevant range is the range of a certain activity level where the assumptions about cost behavior hold true. In other words, it is the volume of production or level of activity over which the cost behavior is assumed to be constant. Therefore, B is the best choice as it accurately describes the relevant range. A, C, and D are incorrect as they do not define the relevant range accurately.

The Relevant Range Is Defined As