Asked by Brenna McPhee on Jul 02, 2024
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
Relevant Range
The range of activity within which assumptions made about cost behavior are valid. Beyond this range, fixed and variable cost patterns may change.
Break-even Point
The level of sales or production at which total revenues equal total costs, resulting in neither profit nor loss.
Contribution Margin
The selling price of a product minus the variable cost per unit, used to cover fixed costs and contribute to net profit.
- Understand the concept of the relevant range and its impact on cost behavior.
Learning Objectives
- Understand the concept of the relevant range and its impact on cost behavior.