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

Financial management, discuss the applicability of an operating cycle in ve...

discuss the applicability of an operating cycle in vegetable growing in a low developed country like Uganda- Africa

FINAL ACCOUNTS- FINANCIAL STATEMENTS, Yolande Tzar came to Northern Ireland...

Yolande Tzar came to Northern Ireland from Poland five years ago to study at university. After graduating she worked as a sales manager for a local company and saved her wages to b

Compute the operating cycle, Under this method, approximation is made of pa...

Under this method, approximation is made of payments and cash receipts in the ensuring period. The dissimilarity of these payments and receipts indicates deficiency or surplus of c

Elimination of non-value activity-jit features, Elimination of non-value ad...

Elimination of non-value added activity JIT manufacturing can be described as a philosophy of management, dedicate to the elimination of waste. Waste is stated as anything whic

Objective function, Objective Function Although the standard LP model c...

Objective Function Although the standard LP model can be either the maximization or the minimization type, it is sometimes useful to convert one form to the other. The maximiz

Decision making environment, Decision Making Environment There are four...

Decision Making Environment There are four main environments within that decisions can be done. These are: •    Certainty •    Risk •    Fundamental uncertainty •    Compet

Explain the ratio analysis according to kosher, Explain the Ratio analysis ...

Explain the Ratio analysis according to kosher A ratio is the relation of the amount a to another b expressed as the ratio of a to b; a: b (a is to b) or a as simple fraction i

Budget, advantage and disadvantage of incremental budget

advantage and disadvantage of incremental budget

Full service recourse factoring, Full Service Recourse Factoring : In this ...

Full Service Recourse Factoring : In this kind of factoring the client has to bear the risk of default made through the debtors. There the factor had advanced funds against book de

Invoice discounting or factoring, If a company creates sales to a number of...

If a company creates sales to a number of customers on credit terms this will have to wait for two or still three months before its debtors pay that they owe. It means that the deb

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