Management Accounting for Cost Estimation, Process Costing, and Budgeted Income Statement

It was July 2005, and Mary Smith, an active community member in Palmerston, Ontario, had just attended a public rally at the local arena in support of reopening the Norgan Theatre (Norgan).

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Added on 2023-06-10

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This article covers topics such as cost estimation, process costing, and budgeted income statement in management accounting. It includes solved assignments, essays, and dissertations on these topics. The article also provides examples and formulas to help readers understand the concepts better.

Management Accounting for Cost Estimation, Process Costing, and Budgeted Income Statement

It was July 2005, and Mary Smith, an active community member in Palmerston, Ontario, had just attended a public rally at the local arena in support of reopening the Norgan Theatre (Norgan).

Added on 2023-06-10

Related Documents

Running head: MANAGEMENT ACCOUNTING 1
Management Accounting
Name
University Affiliation

Management Accounting for Cost Estimation, Process Costing, and Budgeted Income Statement_1

MANAGEMENT ACCOUNTING 2
Month Total
Flights Commercial Flights
Privat
e
Flight
s
Airport
Costs
January 1,000 950 50 $20,000
February 800 400 400 $17,000
March 1,400 1,100 300 $19,000
April 900 850 50 $18,000
May 1,000 925 75 $19,000
June 1,200 1,000 200 $20,000
July 1,100 750 350 $18,000
August 1,400 895 505 $24,000
September 1,000 700 300 $19,000
October 1,200 915 285 $21,000
November 900 840 60 $17,000
December 1,500 1000 500 $21,000
1 Use the Hi-Lo method to estimate variable per flight and
fixed costs.
Max $ 24,000 1,500
Min $ 17,000 800
Change $ 7,000 700
Variable Cost per
flight
$ 10

Management Accounting for Cost Estimation, Process Costing, and Budgeted Income Statement_2

MANAGEMENT ACCOUNTING 3
Fixed Costs $ 9,000
2 Write the cost equation based on your answer above.
Equation:
Y=9000+10
X
3 Use the regression output below to write a cost equation that incorporates commercial and private
flights.
SUMMARY OUTPUT
Regression
Statistics
Multiple R 0.740610474
R Square 0.548503874
Adjusted R
Square 0.448171401
Standard
Error 1467.299438
Observation
s 12 0
ANOVA
df SS MS F
Significance
F

Management Accounting for Cost Estimation, Process Costing, and Budgeted Income Statement_3

MANAGEMENT ACCOUNTING 4
Regression 2 23539957.91 11769978.96
5.4668629
2
0.02792178
2
Residual 9 19376708.76 2152967.64
Total 11 42916666.67
Coefficient
s Standard Error t Stat P-value Lower 95%
Upper
95%
Lower
95.0%
Upper
95.0%
Intercept
12278.923
6 2387.313477 5.143406486 0.0006085
6878.44533
8
17679.401
9
6878.4453
4
17679.401
9
Commercia
l
6.2859863
4 2.475050667 2.539740468
0.0317242
9
0.68703274
5
11.884939
9
0.6870327
4
11.884939
9
Private
6.7480024
8 2.657548722 2.53918298
0.0317533
2
0.73620960
7
12.759795
4
0.7362096
1
12.759795
4
Equation
:
Y=12278.92362+6.2859863(x)
+6.748002484(z)
Least square regression model is the most accurate method of cost estimation since it considers all the variables of the variables under
investigation. It mainly focuses on having a constant and on the other hand coming up with regression formula that generates all the
values to improve the model of calculation. Basically, having it in place ensures that the organization can be able to project all its costs
in a most effective and feasible. It involves analyzing past data using mathematical techniques to determine the variables and fixed
components of a cost and provide an equation that can be used to predict the future expenses. The disadvantage with this cost
estimation techniques is that is complicated and more complex and does not favor personnel who are not well equipped with
mathematics related courses.
Problem 3

Management Accounting for Cost Estimation, Process Costing, and Budgeted Income Statement_4

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