Question: Why is identification of a relevant range important? It allows a company to rely on cost behavior for planning purposes. Cost behavior outside of the
Why is identification of a relevant range important?
It allows a company to rely on cost behavior for planning purposes.
Cost behavior outside of the relevant range is linear, which distorts CVP analysis.
Product costs are higher outside of the relevant range.
It directly impacts the number of units of product a connmany must sell to be profitable.
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