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11 Οκτ 2024 · The relevant range refers to a specific activity level that is bounded by a minimum and maximum amount. Within the designated boundaries, certain or levels can be expected to occur. Outside of that relevant range, revenues and expenses will likely differ from the expected amount.
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12 Μαΐ 2024 · Understanding relevant range helps managers make informed decisions regarding production levels, resource allocation, and budgeting. By staying within the relevant range, managers can predict and control costs more effectively, ensuring optimal performance and profitability for the company.
The relevant range is essential for analyzing cost behavior and making informed managerial decisions regarding production and budgeting. In joint cost allocation, recognizing the relevant range helps determine how costs should be distributed among multiple products produced simultaneously.
In accounting, the term relevant range usually refers to a normal range of volume or normal amount of activity in which the total amount of a company’s fixed costs will not change as the volume or amount of activity changes.
3 Αυγ 2018 · When looking at costs and how costs behave, relevant range is the range of output or production in which our assumptions are true. If you move outside the relevant range, your cost assumptions are no longer valid.
Definition. The relevant range is the span of activity levels within which specific cost behaviors are valid. Outside this range, fixed and variable cost estimates may not hold true.
The relevant range is the range of activity where the assumption that cost behavior is a straight line (linear) is reasonably valid. Managerial accountants like to assume that the relationship between a cost and an activity run in a straight line.
