ch3天津财经大学管理会计中文版.pptx

Activity Cost Behavior;;4. Evaluate the reliability of a cost equation. 5. Discuss the role of multiple regression in assessing cost behavior. 6. Describe the use of managerial judgment in determining cost behavior.;Fixed Costs;Cutting machines are leased for $60,000 per year and have the capacity to produce up to 240,000 units a year.;;;Variable Cost;As the cutting machines cut each unit, they use 0.1 kilowatt-hour at $2.00 per kilowatt hour. Thus, the cost of each unit is $0.20 ($2 x 0.1). ;Total Variable Cost Graph;;;Mixed Costs;Mixed;Activity Cost Behavior Model;Flexible Resources;;;Cost;Normal Operating Range (Relevant Range);Three engineers hired at $50,000 each Each engineer is capable of processing 2,500 change orders $90,000 was spent on supplies for the engineering activity There were 6,000 orders processed The company could process as many as 7,500 orders;Available orders = Orders used + Orders unused 7,500 orders = 6,000 orders + 1,500 orders Fixed engineering rate = $150,000/7,500 = $20 per change order Variable engineering rate = $90,000/6,000 = $15 per change order;The relationship between resources supplied and resources used is expressed by the following equation:;Cost of orders supplied = Cost of orders used + Cost of unused orders = [($20 + $15) x 6,000] + ($20 x 1,500) = $240,000;;;Methods for Separating Mixed Costs;;;;;;Y = a + b (x);The Scatterplot Method;Activity Cost;Activity Cost;Activity Cost;The Method of Least Squares;The Method of Least Squares;The Method of Least Squares;Coefficient of Correlation;Coefficient of Correlation;Coefficient of Correlation;TC = b0 + ( b1X1) + (b2X2) + . . . ;Multiple Regression;Multiple Regression;The results gives rise to the following equation: Utilities cost = $243.11 + $1.097(Machine hours) + ($510.49 x Summer) R2 = .967, or 96.7 percent of the variation in utilities cost is explained by the machine hours and summer variables.;Manageri