The relevant range of activity is the activity level at which the company makes the highest amount profits. Fixed costs per unit decline as the activity level increase within the relevant range of activity. A period cost is defined as the cost incurred when asset is used up or sold for the purpose of generating revenue. Opportunity costs could be defined as the revenue lost when one alternative is not taken in favor of another alternative.

The relevant range of activity is the activity level at which the company makes the highest amount profits. Fixed costs per unit decline as the activity level increase within the relevant range of activity. A period cost is defined as the cost incurred when asset is used up or sold for the purpose of generating revenue. Opportunity costs could be defined as the revenue lost when one alternative is not taken in favor of another alternative.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 14MC: Which of the following statements is true regarding average fixed costs? A. Average fixed costs per...

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