mahm8e chapter03.ab.az
Post on 05-Jul-2018
227 Views
Preview:
TRANSCRIPT
-
8/16/2019 MAHM8e Chapter03.Ab.az
1/27
1
PowerPointPowerPoint Presentation byPresentation by
Gail B. WrightGail B. WrightProfessor Emeritus of AccountingProfessor Emeritus of Accounting
Bryant UniversityBryant University
© Copyright !!" #homson $outh%Western& a part of #he
#homson Corporation. #homson& the $tar 'ogo& an(
$outh%Western are tra(emar)s use( herein un(er license.
MANAGEMENT
ACCOUNTING
8th EDITION
BY
HANSEN & MOWEN
* AC#+,+#- C$# BE/A,+0
STUDENT EDITION
-
8/16/2019 MAHM8e Chapter03.Ab.az
2/27
2
1. Define cost behavior for fixed, variable, &
mixed costs.
2. Explain the role of the resource usage modelin understanding cost behavior.
3. Separate mixed costs into their fixed &
variable components using the high-lo
method, scatterplot method, and method of
least s!uares.
LEARNING OBJECTIVES
"ontinued
-
8/16/2019 MAHM8e Chapter03.Ab.az
3/27
3
#. Evaluate the reliabilit$ of a cost e!uation.
%. Discuss the role of multiple regression in
assessing cost behavior.
. Describe the use of managerial 'udgment in
determining cost behavior.
LEARNING OBJECTIVES
-
8/16/2019 MAHM8e Chapter03.Ab.az
4/27
4
(f )edd$ *eaters produces
tice as man$ heaters as last$ear, ill production costs
double+
NO. Variable costs ill double if
production doubles but fixed
costs ill not change.
1
-
8/16/2019 MAHM8e Chapter03.Ab.az
5/27
5
1+2E3 C$#4 3efinition
ixed costs do not var$ over the
relevant range.)edd$ *eaters/ 1 cutting
machine costs 0, per $ear
& can produce up to 2#,, 3-inch segments
1
-
8/16/2019 MAHM8e Chapter03.Ab.az
6/27
6
,A0+AB'E C$#4 3efinition
ariable costs var$ in direct
proportion to changes in output.)edd$ *eaters/ 1 segment uses
.1 iloatts at cost of 02. per
iloatt. Each segment costs0.2.
1
-
8/16/2019 MAHM8e Chapter03.Ab.az
7/27
7
5+2E3 C$#4 3efinition
4ixed costs have a variable and
a fixed component.
)edd$ *eaters/ sales people
earn a 01, salar$ 5 0.%
commission on each heater sold.
1
-
8/16/2019 MAHM8e Chapter03.Ab.az
8/27
8
C$# BE/A,+0 AC#+,+#+E$
Ever$ activit$ has a
6ime hori7on for measurement
)esources to accomplish the tas
4aterials
abor
"apital
utput measures 8activit$ drivers9
1
Materials
a!"r
Ca#ital
-
8/16/2019 MAHM8e Chapter03.Ab.az
9/27
9
CAPAC+#-4 3efinition
"apacit$ for an activit$ is the
amount of an activit$ a compan$can perform.
Practical capacit$ is the level at
hich compan$ can performefficiently.
2
a$"%t "f a a'ti(it) a'"$#a) 'a #erf"r$.
-
8/16/2019 MAHM8e Chapter03.Ab.az
10/27
10
*o much capacit$ does a
compan$ need+ :hat happensif there is excess capacit$+
;eed for capacit$ depends on
level of performance re!uired.
Excess capacit$ affects cost behavior.
2
-
8/16/2019 MAHM8e Chapter03.Ab.az
11/27
11
1'E2+B'E 0E$U0CE$
!uantit$ demanded?????; E@"ESS "
-
8/16/2019 MAHM8e Chapter03.Ab.az
12/27
12
C55+##E3 0E$U0CE$
-
8/16/2019 MAHM8e Chapter03.Ab.az
13/27
13
C55+##E3 0E$U0CE$4Can Be
C"$$itted fixed '"sts, such as
a building or e!uipment bought,leased or
C"$$itted dis'reti"ar)
'"sts, such as implicit contractsith emplo$ees.
2
-
8/16/2019 MAHM8e Chapter03.Ab.az
14/27
14
$#EP C$#4 3efinition
Step-costs exhibit a discontinuous
behavior pattern.
Step-costs are constant for a certain
range of output, then 'ump to another
level, remaining constant again over a
certain range of output.
2
-
8/16/2019 MAHM8e Chapter03.Ab.az
15/27
15
C/A6GE 03E0 E7UA#+6$
CHANGE O*DE* > +ixed C"st 5 ,aria!le C"st
> Engineering "ost 5 Suppl$ "ost
+ixed a'ti(it) rate >6otal committed cost
6otal capacit$ available
,aria!le a'ti(it) rate >
6otal cost of flexible resources
"apacit$ used
2
-
8/16/2019 MAHM8e Chapter03.Ab.az
16/27
16
'+6EA0+#- A$$U5P#+6ariable cost
assumes a liear
relati"shi#
beteen cost and
activit$ driver.
E2/+B+#E2/+B+# *%"*%"
3
3
-
8/16/2019 MAHM8e Chapter03.Ab.az
17/27
17
/+G/%'W E7UA#+6$
,aria!le rate > "hange in cost "hange in output
8*igh cost F o cost9 8*igh output F o output9
+ixed '"st >
6otal cost for high 8"-9 point
Gariable rate x *igh 8"-9 outputH
3
3
-
8/16/2019 MAHM8e Chapter03.Ab.az
18/27
18
$CA##E0P'# 5E#/3
E2/+B+#E2/+B+# *%88*%88
Scatterplot is amethod of
determining the
e!uation of a line b$
plotting the data on
a graph.
3
3
-
8/16/2019 MAHM8e Chapter03.Ab.az
19/27
19
:hat are the advantages,
disadvantages of scatterplot+
3
Scatterplot
-
8/16/2019 MAHM8e Chapter03.Ab.az
20/27
20
$CA##E0P'# A3,A6#AGE
"an $ou see h$
the high-lo
method doesnKt
ala$s provide the
best cost e!uation+
E2/+B+#E2/+B+# *%8*%8
3
3
-
8/16/2019 MAHM8e Chapter03.Ab.az
21/27
21
'EA$# $7UA0E$
E2/+B+#E2/+B+# *%8**%8*
3
-
8/16/2019 MAHM8e Chapter03.Ab.az
22/27
#
-
8/16/2019 MAHM8e Chapter03.Ab.az
23/27
23
CE11+C+E6# 1
3E#E05+6A#+6 90:
Aercentage of variabilit$ in dependentvariable explained b$ independent
variable)ange/ F 1
*igher is better
Aercentage of variabilit$ in dependentvariable explained b$ independent
variable)ange/ F 1
*igher is better
#
#
-
8/16/2019 MAHM8e Chapter03.Ab.az
24/27
24
CE11+C+E6# 1 C00E'A#+6
S!uare root of coefficient of
determination
4easures hether variables move in
same 859 or opposite 8-9 directions
)ange/ -1 - 51
S!uare root of coefficient of
determination
4easures hether variables move in
same 859 or opposite 8-9 directions
)ange/ -1 - 51
#
%
-
8/16/2019 MAHM8e Chapter03.Ab.az
25/27
25
5U'#+P'E 0EG0E$$+64 3efinition
4ultiple regression uses 2 or more
independent variables 8variablecosts9 in addition to the $-
intercept 8fixed cost9 to explain
the dependent variable.
%
-
8/16/2019 MAHM8e Chapter03.Ab.az
26/27
26
5A6AGE0+A' ;U3G5E6#
(s a method of cost assignment used to
Determine fixed, variable cost
Jses managerial experience
Jses past observation of cost relationships
6o refine statistical estimation results
-
8/16/2019 MAHM8e Chapter03.Ab.az
27/27
27
THE END
CHA0TE* 1
top related