Answer (B) is correct . The relevant range is the range of activity over which unit variable costs and total fixed costs are constant.
Answer (A) is incorrect because Variable costs will change in total, but unit variable costs will be constant across the relevant range.
Answer (C) is incorrect because Actual fixed costs should not vary greatly from budgeted fixed costs for the relevant range.
Answer (D) is incorrect because The relevant range can change whenever production activity changes; the relevant range is merely an assumption used for budgeting and control purposes.
|
