Why Is Identification of a Relevant Range Important

question 201

Multiple Choice

Why is identification of a relevant range important?

• A) It is required under GAAP.
• B) Cost behavior outside of the relevant range is not linear which distorts CVP analysis.
• C) It directly impacts the number of units of product a customer buys.
• D) It is a cost that is incurred by a company that must be accounted for.

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Definitions:

Work Related Stress

The response individuals may have when presented with work demands and pressures that are not matched to their knowledge and abilities.

Worker Compensation Claims

Worker compensation claims are requests made by employees for compensation related to injuries or illnesses sustained as a direct result of their job.

Higher Amounts

Refers to larger quantities, volumes, or numbers in comparison to a standard or previous measure.

Industrial Accidents

Unplanned events that occur in the workplace resulting in injury, illness, or damage, often due to unsafe conditions or practices.