A Cost Formula May Not Be Valid Outside the Relevant

question 99

True/False

A cost formula may not be valid outside the relevant range of activity.

Apply the concept of margin of safety and its significance in break-even analysis.

Understand the concept of operating leverage and its effect on business profitability as sales volume changes.

Apply break-even analysis for businesses selling multiple products.

Recognize assumptions underlying cost-volume-profit analysis and the limitations of these assumptions.