Explain step- and mixed-cost behavior.
Explain management influences on cost behavior.
Measure and mathematically express cost functions and use them to predict costs.
Describe the importance of activity analysis for measuring cost functions.
Measure cost behavior using the engineering analysis, account analysis, high-low, visual-fit, and least-squares regression methods.
Chapter Focus
- Linear-cost behavior
- This chapter focus on costs for which the volume of a product produced or service provided is the major cost driver.
Step-Cost Behavior Patterns
- Step costs change abruptly at intervals of activity because the resources and their costs come in indivisible chunks
Examples
- Lease cost of drilling equipment
Mixed-Cost Behavior Patterns
Definition
- Mixed costs contain elements of both fixed- and variable-cost behavior
- The fixed-cost element is unchanged over a range of cost-driver activity
- The variable-cost element varies proportionately with
Managers’ active influence
- Product or service attributes
- capacity
- technology
Example:
- Choice of process and product design
- Quality level
- Product features
- Distribution channel
Capacity Decisions
- 为了达到一定产能所投入的固定成本
Committed Fixed Costs
- 绝对固定成本来自于对设施，设备，和基础组织的占有
Examples
- Lease payments
- property taxes
- Salaries of key personnel
Discretionary Fixed Costs
- 在一个特定水平上固定的成本，仅仅因为管理者决：这个水平的成本应该满足组织的目标
- 这些成本和产出水平没有明显关系，但是在周期计划中被决定
- 在每一期，管理层会决定花多少在这些可选择的项目上
Examples
- Research and development
- Employee training
- advertising and promotion
- management salaries
Cost Funtions
- First Step: measuring cost behavior as a function of appropriate cost drivers
Second Step: estimate future costs at expected levels of cost-driver activity
$Y=F+VX$
Standards
- Plausibility: personal observations provides best evidence of a plausible relationship between a resource and its cost driver
- Reliability
- fit is good
- conditions do not change in the future
Choice of Cost Drivers- Activity Analysis
- Choosing a cost function starts with choosing cost drivers
- Managers use activity analysis to identify appropriate cost drivers
- Activity Analysis —> appropriate cost drivers for each cost
Methods of Measuring Cost Functions
- Engineering analysis
- Account analysis
- High-low analysis
- Visual-fit analysis
- Least-squares regression analysis