Gathering data-plotting graph-cost estimating relationship, Managerial Accounting

Gather data concerning the relationship among the dependent and independent variables

Collecting data is generally the most hard and time-consuming element of CER development. It is necessary that all data be checked and double checked to make sure that all observations are appropriate, comparable, and relatively free of unusual costs.

An adequate number of past observations should be acquired to derive an acceptable cost function.  This must be adjusted to reflect any change of circumstances example, changes in price levels caused by inflation, changes in kinds of equipment used, and so on. The time period used to measure the dependent variable and the cost driver must be similar.

Plot the data on a graph

The graph (generally termed to as a scatter diagram) will point out the common relationship among the dependent variable and the cost driver and will give a visual signal as to whether a lineal cost function can estimate the cost behavior. It will also highlight great observations.

Posted Date: 12/4/2012 7:34:09 AM | Location : United States







Related Discussions:- Gathering data-plotting graph-cost estimating relationship, Assignment Help, Ask Question on Gathering data-plotting graph-cost estimating relationship, Get Answer, Expert's Help, Gathering data-plotting graph-cost estimating relationship Discussions

Write discussion on Gathering data-plotting graph-cost estimating relationship
Your posts are moderated
Related Questions
What are the duties of the Public Company Accounting Oversight Board?

Advantages of ratio analysis 1) Helpful in financial analysis: financial analysis is easier if accounting ratios are used to analyze the different financial statement relatio

How much was Topaz’s operating income (income before taxes) last year?

Deposits from the public are one of the important sources of finance mainly for fine established big companies along with a vast capital base. The period of public deposits is rest

CONSULTING PROJECT Pricing and Production Decisions at PoolOut Ltd  PoolOut Ltd manufactures and sells a single product called the "RainIn", which is a patent-protected au

State Material price variance Difference among standard price and the actual price of the material is the material price variance. This variance arises because of various facto

What is kaizen Kaizen is the Japanese term for continuous improvement. The kaizen concept was pioneered by in Japan by Toyota as daily challenge to all its to improve their pro

Your manager has informed you that the company is trying to determine if it should use a periodic system or a perpetual system in accounting for the inventory. He wants you to spea

According to the Philadelphia Inquirer, in 2004 the city of Philadelphia planned to spend $14 million to convert the Convention Center into an appropriate venue for the Republican

You are charged with describing the important considerations in the decision-making process to upper management. In your response, be sure to include the following: • A descript