Limited time offer 20% OFF StudySoup Subscription details

# UWSP - ACCT 212 - Class Notes - Week 3

### Created by: Jenna Gajewski Elite Notetaker

> > > > UWSP - ACCT 212 - Class Notes - Week 3

UWSP - ACCT 212 - Class Notes - Week 3

##### Description: Chapter three covers Cost Behavior and Forecasting including all of the methods and equations
This preview shows page 1 of a 2 page document. to view the rest of the content
Accounting 211 Week 3 Lecture Notes Chapter 3: Cost Behavior and Forecasting Cost behavior: - The foundation upon which managerial accounting is built - Describes whether a cost changes when the level of output changes - Variable costs: changing costs (vary by units produced) o Cost driver: casual factor that measures the output of the activity  that leads or causes costs to change Ex. weather for an airline company Helps to predict and control costs - Fixed costs: costs that stay the same  o Fixed cost / units produced  Varies inversely by number of units produced  Only fixed for a certain period of output o Discretionary fixed Cost Fixed amount that doesn’t vary with production directly, but
it can change
- Mixed costs: have changing and constant components o Y = mx + b (Y = a + bx)
o Methods for separating mixed costs
High low Find points: largest and smallest points in cost drivers Using the high and low points, calculate the variable
rate
o Variable Rate= (High Point Cost – Low Point  Cost) /       (High Point Output – Low Point
Output)
Calculate the fixed cost using the variable rate and
either the high point or low point
o Fixed cost = Total cost at high point –  (Variable Rate x Output at High Point) Form the cost formula for materials handling based on
the high-low
o Total cost = Fixed Cost + (Variable Rate x X) Scatter-graph Method  Plot points on a graph so the relationship between
materials handling costs and activity output can be
seen
Inspect the graph to reveal outliers to justify
elimination for a better estimate
Visually fit a line to the data points

This is the end of the preview. Please to view the rest of the content
Join more than 18,000+ college students at University of Wisconsin - Stevens Point who use StudySoup to get ahead
2 Pages 36 Views 28 Unlocks
• Notes, Study Guides, Flashcards + More!
Join more than 18,000+ college students at University of Wisconsin - Stevens Point who use StudySoup to get ahead
##### Description: Chapter three covers Cost Behavior and Forecasting including all of the methods and equations
2 Pages 36 Views 28 Unlocks
• Notes, Study Guides, Flashcards + More!
×

I don't want to reset my password

Need help? Contact support

Need an Account? Is not associated with an account
We're here to help