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

Variance analysis and standard costing, Variance Analysis and Standard Cost...

Variance Analysis and Standard Costing Standard costing is defined with CIMA like a technique that uses standards for revenues and costs for the purpose of control via varianc

Realized gain or loss on the exchange, Pauline's Pastry Shop decides to rem...

Pauline's Pastry Shop decides to remodel its offices this year. As part of the remodeling, Pauline's trades furniture with a cost of $12,000 that had been expensed in the year of p

Relevant costs and decision-making, Relevant Costs and Decision-Making ...

Relevant Costs and Decision-Making The relevance of costs will depend upon the purpose for that they are being utilized. Relevance is related to future decisions. The relevanc

Calculate the weighted average cost of capital, A company is investigating ...

A company is investigating the effect on its cost of capital with respect to the tax rate. Suppose there is a capital structure of 20% debt, 10% preferred stock, and 70% common sto

Incremental costs as relevant costs, Incremental Costs as Relevant Costs ...

Incremental Costs as Relevant Costs An incremental cost is specifically incurred with the following a course of action and ignorable if such action is not implemented. It cont

Determine the allocation of dividends, Sleep Corporation was organized on J...

Sleep Corporation was organized on January 1, 2011. During its first year, the corporation issued 40,000 shares of $5 par value preferred stock and 400,000 shares of $1 par value c

Fixed budgeting, Fixed Budgeting The master budget discussed before is...

Fixed Budgeting The master budget discussed before is a fixed budget. A fixed budget is defined via as: 1. Just one level of activity 2. Not adjusted to re

Market-based transfer price optimal, Under what conditions is a market-base...

Under what conditions is a market-based transfer price optimal?

Labour costs, what are the classifications of labour costs? what is employe...

what are the classifications of labour costs? what is employee psyche?

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