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

Question

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The relevant range refers to the range of activity or level of output within which the assumptions about the cost behavior are valid. It is the range of activity or production levels over which the management expects the company to operate during a certain period. This is important because it allows the company to make accurate cost projections and budgeting decisions based on a realistic understanding of how costs will behave within this range. Option A is incorrect because costs can vary outside of the relevant range, but this doesn't affect the behavior assumptions within the relevant range. Option C is too narrow in its definition of the relevant range, as it only covers a subset of costs, while the concept of relevant range includes all costs. Option D is incorrect because margin of safety is unrelated to the relevant range.

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