The term 'relevant range', as used in cost accounting, means the range:

Question

Quizplus · Accepted Answer

The relevant range is the activity range in which an entity expects to operate and where certain cost behavior patterns are valid. It is important for managers to understand the relevant range to make accurate decisions about pricing, product offerings, and budgeting. Option A is incorrect because the relevant range is not just about cost fluctuations; rather, it is about the activity range. Option B is partially correct because relevant costs are incurred within the relevant range, but it does not capture the entire meaning of the term. Option C is incorrect because the relevant range is not related to margin of safety.

The Term 'Relevant Range', as Used in Cost Accounting, Means