The term relevant range as used in cost accounting means the range over which cost relationships are
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Question:
- The term “relevant range” as used in cost accounting means the range over which
- cost relationships are valid
- production may vary
- costs may fluctuate
- relevant costs are incurred
- Cost-volume-profit analysis assumes that over the relevant range total.
- Revenues are linear.
- Variable costs are nonlinear.
- Costs are unchanged.
- Fixed costs are nonlinear.
- Breakeven analysis assumes linearity over the relevant range with respect to
Total costs | Total revenue | |
A. | Yes | No |
B. | Yes | Yes |
C. | No | Yes |
D. | No | No |
- An assembly plant accumulates its variable and fixed manufacturing overhead costs in a single cost pool, which is then applied to work-in-process using a single application base. The assembly plant management wants to estimate the magnitude of the total manufacturing overhead costs for different volume levels of the application activity base using a flexible budget formula. If there is an increase in the application activity base that is within the relevant range of activity for the assembly plant, which one of the following relationship regarding variable and fixed costs is correct?
A. The variable cost per unit is constant, and the total fixed costs decrease.
B. The variable cost per unit is constant, and the total fixed costs increase.
C. The variable cost per unit and the total fixed costs remain constant.
D. The variable cost per unit increases, and the total fixed costs remain constant.
Related Book For
Cost Management Accounting and Control
ISBN: 978-0324559675
6th Edition
Authors: Don R. Hansen, Maryanne M. Mowen, Liming Guan
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