《Management Accounting》Chapter 2作业成本性态.ppt

b = $3,750 – $1,000 500 – 100 b = $6.875 Step 2: Using either the high cost or low cost, solve for the total fixed cost (a). The High-Low Method Y = a + b (x) $3,750 = a + $6.875(500) $312.50 = a High End Y = a + b (x) $1,000 = a + $6.875(100) $312.50 = a Low End The cost formula using the high-low method is: Total cost = $312.50 + ($6.875 x Setup hours) The High-Low Method The Scatterplot Method Activity Cost 0 Activity Output * * * * * The Scatterplot Method Nonlinear Relationship Activity Cost 0 Activity Output * * * * * * The Scatterplot Method Upward Shift in Cost Relationship Activity Cost 0 Activity Output * * * * * * The Scatterplot Method Presence of Outliers Estimated regression line Estimated fixed cost The Method of Least Squares Spreadsheet Data for Larson Company The Method of Least Squares Regression Output for Larson Company The Method of Least Squares The results give rise to the following equation: Setup costs = $125 + ($6.75 x Setup hours) R2 = .944, or 94.4 percent of the variation in setup costs is explained by the number of setup hours variable. Coefficient of Correlation Positive Correlation Machine Hours Utilities Costs r approaches +1 Machine Hours Utilities Costs Coefficient of Correlation Negative Correlation Hours of Safety Training Industrial Accidents r approaches -1 Hours of Safety Training Industrial Accidents Coefficient of Correlation No Correlation Hair Length Accounting Grade r ~ 0 Hair Length Accounting Grade TC = b0 + ( b1X1) + (b2X2) + . . . b0 = the fixed cost or intercept b1 = the variable rate for the first independent variable X1 = the first independent variable b2 = the variable rate for the second independent variable X2 = the second independent variable Multiple Regression Multiple Regression Data for Phoenix Factory Utilities Cost Regression Multiple Regression Multiple Reg