A CPA Is Permitted to Accept a Separate Engagement (Not

question 582

Multiple Choice

A CPA is permitted to accept a separate engagement (not in conjunction with an audit of financial statements) to audit an entity's:

• A) Option A
• B) Option B
• C) Option C
• D) Option D

---

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.