not sure
With a decrease in activity within the relevant range, variable costs will typically decrease as they are directly proportional to the level of activity, such as production or sales volume. Fixed costs, on the other hand, remain unchanged within the relevant range regardless of the activity level. However, if the decrease in activity is significant enough to fall outside the relevant range, some fixed costs may become variable or change. Overall, the primary impact will be a reduction in total variable costs.
yes
unit fixed costs and total variable cost
Unit Fixed Cost and Total Variable Cost Kenny Kalejaiye
true
The flexible budget uses the master budget as its basis. To develop the flexible budget, management should take the following steps. 1. Identify the activity index and the relevant range of activity. 2. Identify the variable costs, and determine the budgeted variable cost per unit of activity for each cost. 3. Identify the fixed costs, and determine the budgeted amount for each cost. 4. Prepare the budget for selected increments of activity within the relevant range.
The relevant range of activity refers to the specific volume of production or sales within which the assumptions of cost behavior—such as fixed and variable costs—remain valid. It is significant in Cost-Volume-Profit (CVP) analysis because it helps businesses understand how costs and profits will behave at different levels of activity. Outside this range, fixed costs may change, or variable costs might not remain constant, potentially distorting financial forecasts and decision-making. Thus, accurately identifying the relevant range is crucial for effective planning and analysis.
The range of an independent variable refers to the set of values that the variable can take in a given study or experiment. It is determined by the experimental design or the specific conditions under which the data is collected. For example, if the independent variable is temperature, the range might be from 0°C to 100°C, depending on the context. Understanding the range is crucial for analyzing the effects of the independent variable on the dependent variable.
From the minimum value of the independent variable to its maximum.
It is a value in the co-domain [range] of the function.
The independent variable, or manipulating variable always affect the outcome of a dependent, or responsive, variable. For example, i have a fire going, and i want to put it out. I could use a range of materials. The range of materials is the independent variable, while the fire going out or not is the dependent variable. This shows a cause and effect.
The relevant range refers to the level of activity or volume within which fixed and variable cost behavior remains consistent. It is the range of production or sales levels where the assumptions about cost behavior, such as fixed costs remaining constant and variable costs per unit being stable, are valid. Outside this range, costs may change, potentially leading to different cost structures and affecting decision-making. Understanding the relevant range is crucial for budgeting, forecasting, and cost management.