The range in which relationship exists between level of activity or total cost is called ___________?
Correct answer: B. relevant range
- A. functional range
- B. relevant range
- C. unit range
- D. related range
Explanation
The relevant range is the activity interval within which cost behavior assumptions, such as fixed cost and variable cost rates, remain reasonably valid. It is not merely a range of units or a general related range.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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