Steps of developing a cost estimating relationship , Managerial Accounting

Assignment Help:

STEPS OF DEVELOPING A COST ESTIMATING RELATIONSHIP

Firmly speaking, a CER is not a quantitative method. It is a framework for using suitable quantitative methods to quantify a relationship among an independent variable and cost or price. Development of a CER is a 6-step procedure as shown below:

Step1: State (or select) the dependent variable (Y)

Step2: Select the cost driver(s)

Step3: Gather data concerning the relationship among the dependent and independent variables

Step4: Plot the data on a graph

Step5: Choose the relationship which best predicts the dependent variable

Step6: Test the consistency of the cost function


Related Discussions:- Steps of developing a cost estimating relationship

Queuing problems, Queuing problems There are two main approaches to que...

Queuing problems There are two main approaches to queuing problems: •    simulation •    queuing theory formula Where simple situations apply, queuing theory should be used

Costs and benefits of factoring, Two types of costs concerned in factoring ...

Two types of costs concerned in factoring are as: 1) The service fee or factoring commission 2) The interest on advances granted through the factor to the firm. Factoring

What are the changing role of management accounting, What are the Changing ...

What are the Changing role of management accounting 1. Focus on customer scarification: customer satisfactions are continuously gaining high priority in management thinking i

Return on investment-residual income, Return on Investment and Residual Inc...

Return on Investment and Residual Income This is a traditional approach to performance measurement given by: ROI =     Income          Invested Capital               (m

Advantages of abc analysis, ADVANTAGES OF "ABC ANALYSIS" The advantages...

ADVANTAGES OF "ABC ANALYSIS" The advantages derived from this analysis and its consequent follow up are summarized below: 1) Facilities selective control and thereby save va

Industrial Grinders, accepted#Regarding the Overhead costs, these are alloc...

accepted#Regarding the Overhead costs, these are allocated based on Direct Labor;

Distinguish between advertising and public relation, Question 1: a. Dis...

Question 1: a. Distinguish between Advertising and Public Relation? b. Discuss the methods adopted by a Public Relation company in promoting the image of a destination in th

Planning-role of management accountant , Planning Planning is the funda...

Planning Planning is the fundamental function of the management by means of which the managers decide: What goals are to be accomplished How they will be accomplished.

Standard costing and budgetary control , STANDARD COSTING AND BUDGETARY CON...

STANDARD COSTING AND BUDGETARY CONTROL In practice, the terms standard cost and budgeted cost might be used interchangeably. Whereas it is possible to have budgeting without s

Predetermined Overhead Rate, Logan Products computes its predetermined over...

Logan Products computes its predetermined overhead rate annually on the basis of direct labor hours. At the beginning of the year, it estimated that 39,000 direct labor-hours would

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