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    Cost Account For Engineers - Set 2 - Classes

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    arre
    The document summarizes the total cost and production volume of a company over six months. It provides the total cost and production in units for each month. It then estimates the unit variable cost and fixed cost using three methods: a) the high-low point method estimates a variable cost of €92.31 and fixed cost of €892.31. b) The high-low sub-period method estimates variable costs of €101.75 and €86.84 with fixed costs of -€108.19 and €1294.74. c) The least squares method estimates a variable cost of €90.36 and fixed cost of €1352.73. It then provides predicted total costs for 130 and 140 units

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    Cost Account For Engineers - Set 2 - Classes

    Uploaded by

    arre
    18 views4 pages
    The document summarizes the total cost and production volume of a company over six months. It provides the total cost and production in units for each month. It then estimates the unit variable cost and fixed cost using three methods: a) the high-low point method estimates a variable cost of €92.31 and fixed cost of €892.31. b) The high-low sub-period method estimates variable costs of €101.75 and €86.84 with fixed costs of -€108.19 and €1294.74. c) The least squares method estimates a variable cost of €90.36 and fixed cost of €1352.73. It then provides predicted total costs for 130 and 140 units

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    An excercise having practical sums of cost accounting

    Original Title

    Cost Account for Engineers - Set 2 - Classes

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    The document summarizes the total cost and production volume of a company over six months. It provides the total cost and production in units for each month. It then estimates the unit variable cost and fixed cost using three methods: a) the high-low point method estimates a variable cost of €92.31 and fixed cost of €892.31. b) The high-low sub-period method estimates variable costs of €101.75 and €86.84 with fixed costs of -€108.19 and €1294.74. c) The least squares method estimates a variable cost of €90.36 and fixed cost of €1352.73. It then provides predicted total costs for 130 and 140 units

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    18 views4 pages

    Cost Account For Engineers - Set 2 - Classes

    Uploaded by

    arre
    The document summarizes the total cost and production volume of a company over six months. It provides the total cost and production in units for each month. It then estimates the unit variable cost and fixed cost using three methods: a) the high-low point method estimates a variable cost of €92.31 and fixed cost of €892.31. b) The high-low sub-period method estimates variable costs of €101.75 and €86.84 with fixed costs of -€108.19 and €1294.74. c) The least squares method estimates a variable cost of €90.36 and fixed cost of €1352.73. It then provides predicted total costs for 130 and 140 units

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    of 4

    The total cost and the production volume in a selected company within 6 months is shown

    in the table below.

    Production volume
    Month Total cost (€)
    (units)
    I 122 12 600
    II 136 13 900
    III 155 15 200
    IV 120 12 300
    V 120 12 000
    VI 116 11 600

    Estimate the unit variable cost and the fixed cost, as well as state the results in equation
    form (the relation between the total cost and the production volume) using:
    a) the high-low point method (high-low method, extreme values method);
    b) the high-low sub-period method;
    c) the least squares method.
    Estimate the predicted total cost for:
     130 units;
     140 units.

    Production Total cost


    Total cost
    Month volume
    (€)
    (units) 16000.00
    14000.00 f(x) = 90.3557910673732 x +
    I 122 12600.00 12000.00
    II 136 13900.00 10000.00
    III 155 15200.00 8000.00
    IV 120 12300.00 6000.00
    V 120 12000.00 4000.00
    2000.00
    VI 116 11600.00
    0.00
    110 115 120 125 130 135

    a) the high-low point method (high-low method, extreme values method)

    Q TC
    high point 155 15200.00
    low point 116 11600.00

    variable unit cost (marginal cost) VCu 92.31


    fixed cost FC 892.31

    Equation form - the association between total cost (dependant) and production volume (independant)
    TC = FC + VCuQ TC=892.31+92.31Q

    Forecast Q TC
    130 12892
    140 13815

    b) the high-low sub-period method

    Production
    Total cost
    Month volume
    (€)
    (units)
    VI 116 11600.00
    IV 120 12300.00 Low sub-period
    V 120 12000.00
    I 122 12600.00
    II 136 13900.00 High sub-period
    III 155 15200.00

    Q TC
    high point 138 13,900 13250
    low point 119 11,967 11600

    variable unit cost (marginal cost) VCu 101.75 86.84


    fixed cost FC -108.19 1294.74

    Equation form - the association between total cost (dependant) and production volume (independant)
    TC = FC + VCuQ

    Forecast Q TC
    130 13119.88 12584.21
    140 14137.43 13

    c) the least squares method

    Pearson correlation coefficient rxy 0.9865918445

    variable unit cost (marginal cost) VCu 90.36


    fixed cost FC 1352.73

    Equation form - the association between total cost (dependant) and production volume (independant)
    TC = FC + VCuQ TC = 1352.73+90.36Q

    Forecast Q TC
    130 13098.99 13098.99
    140 14002.54 14002.54
    Total cost (€)

    f(x) = 90.3557910673732 x + 1352.73277819833

    0 115 120 125 130 135 140 145 150 155 160

    endant)
    endant)

    endant)

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