Wk3_Tutorial_CostBasics_10 - ACCT2522 Management Accounting...

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1 ACCT2522 Management Accounting 1 Session 1, 2010 Tutorial Week 3 – Cost basics Overall Theme We will explore fundamental assumptions of cost functions and discuss the relationships between cost behaviour, cost estimation and cost prediction. The concept of cost driver analysis and its application to cost estimation and cost management will also be discussed. We will also describe how to estimate cost using managerial judgment, engineering methods and other quantitative techniques. Desired Learning Outcomes and Essential Reading Langfield-Smith, K., H. Thorne and R.W. Hilton (2009). Management Accounting 5e: Information for Managing and Creating Value , 5 th ed, McGraw-Hill Australia Pty Ltd. Chapter 2, pp. 41-61 Chapter 3, pp. 80-106 (include Appendix 3 portion on “Evaluating the regression equation” p. 113-114 TOPIC 3 MANAGING COST I: COST BEHAVIOUR, COST DRIVERS AND COST ESTIMATION After completing this topic, you should be able to: 1. Why are costs important? 2. What does ‘different costs for different purposes’ mean? 3. Understand and apply various classifications of costs. 4. Understand cost drivers and the role of cost driver analysis. 5. Describe and apply the activity hierarchy of costs and cost drivers. 6. Explain the relationships between cost estimation, cost behaviour and cost prediction. 7. Understand and apply various methods for cost estimation. 8. Understand some practical issues faced in estimating cost functions. Self Study Questions and Solutions (complete in your own time) 1. Langfield-Smith, Chapter 2, Question 2.1 2. Langfield-Smith, Chapter 2, Self-study problem 1 p.62 3. Langfield-Smith, Chapter 2, Question 2.31 4. Langfield-Smith, Chapter 3, Self-study problems 1 and 2 p.107-110 5. Langfield-Smith, Chapter 3, P3.43.
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2 Tutorial Questions (must be prepared prior to the tutorial)
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This note was uploaded on 09/19/2011 for the course FINS 3650 taught by Professor Arnold during the Three '11 term at University of New South Wales.

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Wk3_Tutorial_CostBasics_10 - ACCT2522 Management Accounting...

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