The REA Model Is an Alternative Accounting Framework for Modeling

question 12

True/False

The REA model is an alternative accounting framework for modeling an organization's critical resources,events,and accounts.

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Definitions:

Relevant Range

The range of activity within which the assumptions about cost behavior for a company are valid.

Maximum Capacity

The highest level of output or activity that a company can sustain within a specific period under normal operating conditions.

Fixed Cost

Refers to expenses that do not change in total regardless of the level of production or sales volume, such as rent or salaries.

Variable Cost

Variable cost refers to expenses that fluctuate with the level of output or production, such as materials and labor costs.