RSM322 TopicB - 1 2 Agenda Cost Estimation Cost-Volume-Profit(CVP Analysis Topic B Cost Estimation and Cost-VolumeProfit(CVP Analysis While you are

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1/19/2011 1 Topic B Cost Estimation and Cost-Volume- Profit (CVP) Analysis While you are waiting, please take out and display your name cards 1 Agenda Cost Estimation Cost-Volume-Profit (CVP Analysis) 2 Click to edit Master title style 3 Cost Estimation Cost Estimation Cost estimation is the process of developing a well- defined relationship between a cost object and its cost driver(s) The purpose is to generate accurate cost estimates that can be used in the planning process 4
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1/19/2011 2 The Importance of Cost Estimation To help predict future costs that enable: Strategic positioning Value chain analysis Target costing and life cycle costing Performance measurement, evaluation and compensation To identify and understand cost drivers and cost behaviour 5 Steps in Cost Estimation 1. Define the Cost Object to Be Estimated 2. Determine the Cost Drivers 3. Collect Consistent and Accurate Data 4. Graph the Data 5. Select and Employ the Estimation Method 6. Assess the Accuracy of the Cost Estimate 6 Linear Cost Estimation Methods High-Low Method Regression Analysis Work Measurement 7 Discussion Questions Textbook Problem 8-33 Textbook Problem 8-47 8
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This note was uploaded on 04/23/2011 for the course RSM 322 taught by Professor Lisaharvey during the Spring '11 term at University of Toronto- Toronto.

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RSM322 TopicB - 1 2 Agenda Cost Estimation Cost-Volume-Profit(CVP Analysis Topic B Cost Estimation and Cost-VolumeProfit(CVP Analysis While you are

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