Lesson 2 Cost Behavior and Variable Costing 英文管理会计课件 Management Accounting.ppt

Topic 1： Cost Behavior: analysis and use 1 Cost Behavior 2 Cost Estimation Methods 3 Nonlinear and cost function Types of Cost Behavior Patterns Two Assumptions 1. Variations in the level of a single activity (the cost drive) explain the variations in the related total costs. 2. Cost behavior is approximated by a linear cost function within the relevant range. The Activity Base Total Variable Cost Graph Unit Variable Cost Graph Total Fixed Cost Graph Unit Fixed Cost Graph Fixed Costs and Relevant Range Fixed Costs and Relevant Range Criteria for Classifying Variable and Fixed Components of a Cost Choice of Cost Object – different objects may result in different classification of the same cost Time Horizon – the longer the period, the more likely the cost will be variable Relevant Range – behavior is predictable only within this band of activity Mixed Costs Mixed Costs Mixed Costs Example Cost Estimation Methods Industrial Engineering Method Conference Method Account Analysis Method Quantitative Analysis Methods High-Low Method The Scatterplot Method Regression Analysis Industrial Engineering Method Industrial Engineering Method：Estimates cost functions by analyzing the relationship between inputs and outputs in physical terms. Includes time-and-motion studies Very thorough and detailed, but also costly and time consuming Also called the Work-Measurement Method Conference Method Conference Method：Estimates cost functions on the basis of analysis and opinions about costs and their drivers gathered from various departments of a company. Pooling expert knowledge. Reliance on opinions still makes this method subjective. Account Analysis Method Account Analysis Method ：Estimates cost functions by classifying various cost accounts as variable, fixed, or mixed with respect to the identified level of activity . Is reasonably accurate, cost-effective, and easy to use, but is subjective. Qualitative Analysis Qualitative Analysis ：Uses a formal mathematical method to