0
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.
What else can I help you with?
What Level of organization is a nematode?
A nematode is an organism at the multicellular level of organization. It is made up of many cells organized into tissues and organs to perform specific functions.
What is the 4th level of the organization of life?
The fourth level of cell organization is an organ system. The levels of organization are: Cell, Tissue, Organ, Organ system.
What is organ level?
Levels of organization are the way Biology is layered in a hierarchy. For example, organs make up one level, as the fourth level of organization.
What level of organization do cnidarians belong?
B for Plato users but it is a tissue level of organization
What is the level of organization that is less definite in plants?
Organ level
What is relevant rang?
Relevant range is an accounting term that pertains to the minimum and maximum value. It sets the cost boundary in a certain activity level.
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 does the level of activity in an organization depend on?
The level of activity in an organization depends on factors such as market demand, workforce productivity, resources availability, technological advancements, and strategic decisions made by the management. These factors influence the level of production, sales, innovation, and overall business operations within the organization.
What happens as the level of activity decrease within the relevant range?
Although fixed cost per unit decreases with increases in activity levels, total fixed cost is not affected by changes in the activity level within the relevant range.
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.
Which costs wilchange with a decrease in activity within the relevant range?
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.
Will total variable costs increase if the level of activity increases within the relevant range?
yes
An increase in the activity level within the relevant range results in?
A decrease in fixed cost per unit
What happens Cost driver activity level increases within the relevant range?
total fixed costs remain unchanged
What are Advantages of accounting for price level changes?
advantages of price level accounting
What is merit and demerit of price level accounting?
merit and demerit of price level accounting
What is difference between unit-level and batch-level activities?
Unit-level activity have costs that are incurred for every single unit that is produced. Batch-level activity have costs that are incurred for each batch that the company is going to produce, no matter if 3 or 30 units are being produced (e.g. setup costs). This is the explanation I received from my accounting professor at least.
