Asked by
Diamond Smith
on Nov 19, 2024
Verified
As activity decreases within the relevant range, fixed costs remain constant on a per unit basis.
Relevant Range
The range of activity over which a company expects its operating assumptions, such as cost behavior and sales mix, to remain valid, influencing budgeting and financial planning.
Fixed Costs
Costs that do not vary with the level of production or business activity, remaining constant even when output changes.
- Acquire an understanding of how production levels affect fixed and variable costs.
Verified Answer
MW
Learning Objectives
- Acquire an understanding of how production levels affect fixed and variable costs.