Asked by Ricardo Ortiz on Apr 28, 2024

verifed

Verified

The relevant range is that range of activity where:

A) management may not find it important to concern itself.
B) management does not expect the firm to operate.
C) fixed costs remain unchanged.
D) the expected costs exceed the benefits from the activity.

Relevant Range

The scope of activity levels within which assumptions about variable and fixed cost behaviors hold true for management decision-making.

Fixed Costs

Expenses that do not change with the level of output or sales, including rent, salaries, and insurance premiums.

  • Examine how fluctuations in the level of activity within the pertinent scope influence cost dynamics.
verifed

Verified Answer

JB
Jawad BajwaMay 01, 2024
Final Answer :
C
Explanation :
The relevant range is the range of activity where fixed costs remain unchanged. Therefore, option C is the correct answer. Option A and B are incorrect because management always concerns itself with the relevant range and expects the firm to operate within it. Option D is also incorrect because if the expected costs exceed the benefits from the activities, management would not continue with those activities and would look for more profitable options within the relevant range.