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What else can I help you with?
The relevant range concept is not applicable to mixed costs?
false.
Will total variable costs increase if the level of activity increases within the relevant range?
yes
Which cost will change with a decrease in activity within relevant range?
unit fixed costs and total variable cost
What happens Cost driver activity level increases within the relevant range?
total fixed costs remain unchanged
Which costs will change with an increase in activity within the relevant range?
Unit Fixed Cost and Total Variable Cost Kenny Kalejaiye
Define relevant range in accounting?
an increase or decrease on a company's fixed costs is however not only dependent on the relevant period but also on the relevant production range. The total fixed costs will remain constant if the relevant production range can be handled by the same number of production units, producing fewer steps. If a certain step ( certain cost level) encompasses the entire relevant range of activity, the costs are entirely fixed.
The relevant range concept is not applicable to mixed costs?
false.
Why relevant range important?
outside the relevant range, variable cost and fixed cost behaviors patterns may change
How would you describe total fixed costs?
Total fixed costs do not vary as volume levels change within the relevant range.
Will total variable costs increase if the level of activity increases within the relevant range?
yes
Which cost will change with a decrease in activity within relevant range?
unit fixed costs and total variable cost
What happens Cost driver activity level increases within the relevant range?
total fixed costs remain unchanged
Which costs will change with an increase in activity within the relevant range?
Unit Fixed Cost and Total Variable Cost Kenny Kalejaiye
Relevant range of activity?
The relevant range of activity refers to a the current level of production. If production drops or increases, then the relevant range will change.
What are the five assumptions of break even analysis?
1 - All costs are classified as fixed cost or variable cost 2 - Fixed cost remains fixed within relevant range 3 - Behaviour of revenues and costs will be linear within relevant range 4 - In case of multiple products, the proportion of units, price and cost will not change 5 - There is no significant change in inventory level in period in review.
How does predicting the range of the product help in the problem?
PRODUCT GO BRR
How CVP analysis is used in managerial accounting decision making?
Cost-Volume-Profit (CVP) Analysis considers the impact that changes in output have on revenue, costs, and net income. In applying CVP Analysis, costs are separated into variable and fixed costs. This distinction is important because, as mentioned previously, variable costs change with changes in output, whereas fixed costs remain constant throughout what is referred to as a relevant range. CVP analysis is based on the following equation: Profit = Total Revenues - Total variable costs - Total fixed costs
