Chapter 22, Problem 5Q

To determine

Relevant Range: A company always expects a particular amount of revenue, which will be earned, and certain amount of cost, which a company will incur, therefore, this limit or boundary is termed as relevant range.

Variable cost: This cost is directly proportional to the level of output produced, it increase with increase in output and vice versa.

Fixed cost: It is a cost which is constant in the short run, it is not related to any change in the production of goods or service, it will be fixed disregarding of increase or decrease in output.

Cost Behavior Analysis: It refers to analysis of cost which tends to change with change in any business condition.

To explain: Whether the relevant range is indispensable in cost behavior analysis.