Cost estimation, Cost Accounting

Assignment Help:

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.


Related Discussions:- Cost estimation

Statement of changes in working capital, A statement of changes in working ...

A statement of changes in working capital assists us in locating where such changes took place. In the first example we try to demonstrate the increase or decrease in particular it

Internal control activities regarding replacement purchases, Your firm is t...

Your firm is the auditor of Easy Hire Pty Ltd (Easy Hire).the company hires out equipment to industries such as construction, engineering & event management. It has 76 branches nat

Analysis of variance, ANALYSIS OF VARIANCE When the actual are not simi...

ANALYSIS OF VARIANCE When the actual are not similar from the standards, variance exists. Variance may be unfavorable or favorable. When the actual cost is more than the standa

Reserves and surplus, Reserves and surplus or retained earnings usually occ...

Reserves and surplus or retained earnings usually occur out of profitable operations. This is a surplus not distributed through the firm as dividends. Conversely, these are profits

Cost accounting, cost accounting as a descriptive/analytical discipline

cost accounting as a descriptive/analytical discipline

Role of cost accounting in business management, Role of Cost Accounting in ...

Role of Cost Accounting in Business Management The system is a set of interdependent parts that together form a unitary whole such performs some functions. A number of sub sys

Determine the costs of goods, Savage Distribution markets CDs of performing...

Savage Distribution markets CDs of performing artist Little Sister.  At the beginning of October, Savage had in beginning inventory 1,200 Little Sister's CDs with a unit cost of $5

Marginal costing, MARGINAL COSTING As per the Chartered Institute of Ma...

MARGINAL COSTING As per the Chartered Institute of Management Accountants, London, the phrase 'Marginal cost' means - 'the amount at every given volume of output through which

Calculate discounted cash flow, The Integrated Management Project is to be ...

The Integrated Management Project is to be based on an organisation, a strategic business unit, or profit centre that has good potential for growth and development. The brief is to

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd