ACCO 330 - CVP

# ACCO 330 - CVP - ACCO 330 – Cost Accounting...

This preview shows pages 1–6. Sign up to view the full content.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ACCO 330 – Cost Accounting Cost-Volume-Profit Analysis 1 Course outline 1 . Regression Analysis Framework 2. CVP Methodology ACCO 330 – Cost Accounting Cost-Volume-Profit Analysis 2 1. Framework Regression analysis provides confidence intervals (range) when estimating costs This method can be incorporated in cost- volume-profit analysis ACCO 330 – Cost Accounting Cost-Volume-Profit Analysis 3 2.CVP Methodology A. Net income determination when costs are unknown When sales quantities and selling prices are known; the only uncertainty is the estimated total cost Sales will be the known constant Total cost will be the known variable Distribution of net income around the best estimate of income will be the same for the distribution of total cost ACCO 330 – Cost Accounting Cost-Volume-Profit Analysis 4 2.CVP Methodology A. Net income determination when costs are unknown Contract to sell 50,000 units at \$4 per unit Cost function based on 23 observations Cost equation = \$2.50 per unit + \$70,000 per period Standard error is \$1,500 Best estimate of income? Range of income expected with 95% confidence? ACCO 330 – Cost Accounting Cost-Volume-Profit Analysis 5 2.CVP Methodology A. Net income determination when costs are unknown C o n t r a c t t o s e ll 5 0 , 0 0 0 u n it s a t \$ 4 p e r u n it C o s t f u n c t io n b a s e d o n 2 3 o b s e r v a t io n s C o s t e q u a t io n = \$ 2 . 5 0 p e r u n it + \$ 7 0 , 0 0 0 p e r p e r io d S t a n d a r d e r r o r is \$ 1 , 5 0 0 B e s t e s t im a t e o f in c o m e ?...
View Full Document

## This note was uploaded on 01/24/2011 for the course ACCO 330 taught by Professor Mastromonaco during the Fall '10 term at Concordia Canada.

### Page1 / 14

ACCO 330 - CVP - ACCO 330 – Cost Accounting...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online