经典教材成本会计第10章(cma必备).pptVIP

CHAPTER 10 Determining How Costs Behave Cost Functions A cost function is a mathematical representation of how a cost changes with changes in the level of an activity relating to that cost Cost Terminology Variable Costs – costs that change in total in relation to some chosen activity or output Fixed Costs – costs that do not change in total in relation to some chosen activity or output Mixed Costs – costs that have both fixed and variable components; also called semivariable costs Cost Function Assumptions Variations in the level of a single activity (the cost driver) explain the variations in the related total costs Cost behavior is approximated by a linear cost function within the relevant range Graphically, the total cost versus the level of a single activity related to that cost is a straight line within the relevant rage Bridging Accounting and Statistical Terminology The Linear Cost Function Fixed Cost Function, Graphically Variable Cost Function, Graphically Total Cost Function, Graphically Cost Functions Combined 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 Cause and Effect as It Relates toCost Drivers The most important issue in estimating a cost function is determining whether a cause-and-effect relationship exists between the level of an activity and the costs related to that level of activity. Cause and Effect as It Relates toCost Drivers A cause-and-effect relationship might arise as a result of: A physical relationship between the level of activity and costs A contractual agreement Knowledge of operations Note: a high correlation (connection) between activities and costs does not necessarily mean causality Cost Estimation Methods Industrial Engineering Method Conference Method A