The relevant range refers to the activity level within which fixed and variable cost behaviors remain consistent. It is important because decisions regarding budgeting, forecasting, and cost management are based on expected production or sales levels within this range. Outside the relevant range, costs may change, leading to inaccurate financial projections and potentially poor decision-making. Understanding the relevant range helps businesses maintain effective cost control and resource allocation.
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.
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Synonyms: insignificant, unnecessary, inappropriate, unimportant Antonyms: relevant, appropriate, necessary, significant, important
How is this relevant to the study?I need to find all the relevant data.
outside the relevant range, variable cost and fixed cost behaviors patterns may change
The relevant range of activity refers to a the current level of production. If production drops or increases, then the relevant range will change.
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 of operations.
The relevant range is crucial when predicting total costs because it defines the level of activity over which fixed and variable cost behavior remains consistent. Outside this range, costs may change, making predictions inaccurate. Understanding the relevant range ensures that businesses can effectively budget, forecast, and make informed decisions based on expected production levels. Ignoring it can lead to miscalculations in overall costs and impact financial planning and profitability.
The price range that an asset or commodity will fluctuate within. The relevant cost range for a barrel of oil has been increasing dramatically thanks to the US Biden administrations policies and the Ukraine - Russia war, for instance.
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new-recent important-relevant
The span of activity in which a company expects to operate.
The relevant range of activity level in accounting refers to the range of operations over which a company's cost behavior patterns remain consistent. It helps in making accurate cost predictions and budgeting decisions based on historical data. Understanding the relevant range is crucial for management to optimize resources effectively.
relevant
Relevant range is an accounting term that pertains to the minimum and maximum value. It sets the cost boundary in a certain activity level.