What will result from an increase in the activity level within the relevant range?
Answer and Explanation: An increase in the activity level within the relevant range results in b) a decrease in fixed costs per unit.
Which of the following costs would decrease if production levels were increase within the relevant range?
Which of the following costs would decrease if production levels were increased within the relevant range? Total fixed costs. Reason – Total fixed costs are fixed or constant in total, it would not be affected by increase or decrease in the production.
What is the relevant range?
The relevant range is the range of activity (e.g., production or sales) over which these relationships are valid. For example, if the factory is operating at capacity, increasing production requires additional investment in fixed costs to expand the facility or to lease or build another factory.
When a flexible budget is used an increase in production levels within a relevant range would?
| Q. | When a flexible budget is used a decrease in the actual production level within a relevant range would |
|---|---|
| A. | increased total fixed cost |
| B. | decrease variable cost per unit |
| C. | decrease variable cost |
| D. | increase variable cost per unit |
When the activity level is expected to increase within the relevant range What effects would be anticipated with respect to each of the following?
Answer: b) Fixed costs per unit decrease and variable costs in total increase.
When the activity level is expected to decline within the relevant range What effects would be anticipated with respect to each of the following?
11 Cards in this Set
| A variable cost is a cost that remains constant in total throught wide ranges of activity. ToF | False |
|---|---|
| When the activity level in expected to decline within the relevant range, what effects would be anticipated with respect to each of the following | Fixed incrase; variable not change |
Which of these costs will increase or decrease with increase or decrease in production?
When production or sales increase, variable costs increase; when production or sales decrease, variable costs decrease. Variable costs stand in contrast to fixed costs, which do not change in proportion to production or sales volume.
Why is the relevant range important?
Relevant range is important because if you make the assumption that all of your costs will remain constant, whether they are fixed or variable, you may make errors on your projections.
What is the relevant range quizlet?
The relevant range is the range of activity over which a company expects to operate during the year.
When the activity level is expected to decline within the relevant range What effects would be anticipated?
When the activity level is expected to decline within the relevant range, the fixed costs per unit would be expected to increase while variable costs…
Which costs will change with a decrease in activity within the relevant range?
Which costs will change with a decrease in activity within the relevant range? Unit fixed costs and total variable cost.
When the activity level is expected to decline within the relevant range What effects would be anticipated with respect to fixed costs per unit?
11 Cards in this Set
| A variable cost is a cost that remains constant in total throught wide ranges of activity. ToF | False |
|---|---|
| When the activity level in expected to decline within the relevant range, what effects would be anticipated with respect to each of the following | Fixed incrase; variable not change |
What happens when production costs increase?
Therefore, a decrease in producers' costs will increase the supply. Conversely, if production costs increase, the quantity supplied at a given price will decrease. Higher costs mean that producers will have to produce less to be able sell a product at a given price.
What costs increase when production increases?
What Is a Variable Cost? A variable cost is a corporate expense that changes in proportion to how much a company produces or sells. Variable costs increase or decrease depending on a company's production or sales volume—they rise as production increases and fall as production decreases.
What does the term relevant range mean quizlet?
Terms in this set (33) The term "relevant range" as used in cost accounting means the range over which. A. relevant costs are incurred.
What is relevant range and why is it important?
The relevant range refers to a specific activity level that is bounded by a minimum and maximum amount. Within the designated boundaries, certain revenue or expense levels can be expected to occur. Outside of that relevant range, revenues and expenses will likely differ from the expected amount.
Why is determination of a relevant range important?
Why is relevant range important? Relevant range is important because if you make the assumption that all of your costs will remain constant, whether they are fixed or variable, you may make errors on your projections.
Why do cost structures change when relevant range changes?
Why would the cost behavior change outside of the relevant range of activity? Cost behavior often changes outside of the relevant range of activity due to a change in the fixed costs. When volume increases to a certain point, more fixed costs will have to be added.
What type of change is rise in production?
So increase or rise in production indicates economic growth. Increase or rise in production indicates economic growth.
Why have production costs increased?
When consumer demand is up, companies buy more of the raw inputs and materials they need from suppliers to meet demand. An influx of orders can drive the supplier prices up. Producer prices rose 4.2% year-over-year in March. That's the biggest increase since 2011.
When production increases what decreases?
Fixed Costs and Production Volume: Both are directly related, for example, if production increases, variable costs increase, while if production decreases, variable costs decrease.
Which costs are affected by the level of output produced?
Variable costs are those costs that change as output changes. Fixed costs can be quite large. In the airline industry, for example, fixed costs range from 40 to 70 percent of total costs.
Which of the following pertains to the relevant range?
The correct answer to this question is c) The relevant range is the range of output over which cost assumptions are valid.
What causes productivity to increase?
Productivity increases when: more output is produced without increasing the input. the same output is produced with less input.
What is productivity What is the effect of an increase in productivity on the supply of a good?
In economics, productivity refers to how much output can be produced with a given set of inputs. Productivity increases when more output is produced with the same amount of inputs or when the same amount of output is produced with less inputs. There are two widely used productivity concepts.
What happens when production increases?
Producers with lower costs will always be able to supply more of a product at a given price than those with higher costs. Therefore, a decrease in producers' costs will increase the supply. Conversely, if production costs increase, the quantity supplied at a given price will decrease.
What happens to demand when production increases?
For example, when production costs rise, the demand curve remains the same and allows for a comparison between the profits that would come from a higher price point (but decreased demand) and steady demand with a lower profit margin on each item sold.
What is increased production?
In fact, the Economics Library defines it simply as "output per unit of input." Productivity improvement, then, means getting more done – more output – with the same amount of input. Even better, the best improvements can allow your business to increase productivity while decreasing cost.
When production increases the variable cost?
When production or sales increase, variable costs increase; when production or sales decrease, variable costs decrease. Variable costs stand in contrast to fixed costs, which do not change in proportion to production or sales volume.
Which cost always increases as output increases?
Answer and Explanation: The correct answer is A. Total cost. Total cost is the entire cost used in the production of a commodity.