A Relevant Range Is a Span of Activity for a Given

question 37

True/False

A relevant range is a span of activity for a given cost object where both total fixed costs and total variable costs per unit of activity remain constant.

---

Definitions:

Sunk Costs

Costs that have already been incurred and cannot be recovered, which should not affect future business decisions.

Capital Project

A long-term investment undertaken to build, add or improve on a capital asset such as buildings or infrastructure, with the expectation of enhancing value.

Sunk Costs

Costs that have already been incurred and cannot be recovered or refunded.

Incremental Cash Flows

The extra cash flow an organization gains by initiating a new project.