Cost estimation, Cost Accounting

Cost Estimation 

Cost estimation may be defined with 'a study that attempts to predict among costs and the activity level or cost driver that causes those costs. In practically, managers frequently encounter that cost drivers like what is a cost driver? Hence like machine hours, number of transaction,  labour hours, work cells and units of output.

The cost estimating function is "y = a + bx"

Whereas:

- Y  signifies net cost

- A signifies cost fixed component of the net cost

- bx signifies the variable costs component of the total cost

- b signifies the unit variable cost it is the gradient of the equation

- x signifies output level

This is the common straight line equation that you have been encountering in elementary mathematics.

Posted Date: 2/5/2013 3:14:26 AM | Location : United States







Related Discussions:- Cost estimation, Assignment Help, Ask Question on Cost estimation, Get Answer, Expert's Help, Cost estimation Discussions

Write discussion on Cost estimation
Your posts are moderated
Related Questions
The sales revenue line demonstrates the amount of sales earned throughout the different level of activities. It can be observed that between zero and somewhere between activity B a

Develop costing for the production units to explain the manufacturing expenses that the proposed product will require for the first year of production. This portion requires the fo

1. Why does rent control result in a shortage of rental units. 2. How does price elasticity of demand affect how much of a tax is passed on to the consumer and how much is absor

These are losses on account of uncollectable debts. While the amount due from debtors is irrecoverable, it is termed as bad debts. Bad debts, being loss are closed through transfer

This is the amount charged due to the usage and passage of time. Fixed assets are utilized for earning revenue. Thus, a decrease in their value is considered to be the operational

WORKED EXAMPLES OF EXPECTED CASH COLLECTIONS PATTERNS

Smith Corporation purchased an intangible asset for $110,000. Compute the second year's tax amortization. The second year would be a full year's amortization. The company estimates

Labour Costs Definition of Labour Cost A labour cost refers to all the costs incurred in compensating the human resources used in the production process to provide a us

Average costing method has the following main advantages: 1.It is a realistic costing method useful to management in analyzing operating results and appraising future production

Make-or buy and relevant costs - The assembly division of Davenport, Inc., is bidding on an order of 50,000 smart phones. The division is eager to get this order because it has a s