The above
The variable cost portion of the mixed cost mixed cost is:
| Change in cost machine | Change activity hour activity in cost | $2,400 | $0.80 per machine hour | Variable cost = |
| Change in | 3,000 | Bagian fixed cost = Total cost – | Variable cost element | = $9,800 – ($0.80 x 8,000 x 8,000 machine ($0.80hours) = $3,400 |
So the cost equation is: So the cost equation is:
Y = $3,400 + $0.80X Y = $3,400 + $0.80X
THE SCATTERGRAPH METHOD THE SCATTERGRAPH METHOD
This method of only removes observing the two disadvantage of only the high-low observing two extreme points and volume from points, a combination by constructing of activity from a cost combination of cost and activity volume extreme points, by constructing all scatter and lines draw through the lines through the points and draw linear.
Then one coordinate point that touches the linear line is taken to calculate Then one coordinate point that touches the linear line is taken to calculate Then one coordinate point that touches the linear line is taken to calculate
tarif variable cost-nya. Total cost for 7,300 machine hours Total =
the regression cost regression line) for….
7,300 (a line) point machine …. $9,100 falling hours on$3,300 the lling on Less fixed cost element ………………… Less fixed cost element …………………
=
Variable cost element ………………………= $5,800 Variable cost element ………………………
So, the variable cost rate is: $ 5,800 : 7,300 machine hour = $ 0.795 per machine hour,
and the cost equation:
Y = $3,300 + $0.795X
THE LEAST-SQUARE METHOD
The scattergraph method already includes all coordinate points in the graph, but the drawing of the linear line only relies on visual observation so that it is objectivity and the accuracy is still low.
This drawback is overcome by the least-squares method using a mathematical formula to estimate the cost line in the form of a regression line. The regression equation on which it is based is:
Y = a + bX, dimana:
Y = Dependent variable (the total mixed cost observed)
a = Vertical intercept of the line (the total fixed cost)
b = Slope of the line (the variable rate)
X = Independent variable (the activity level observed)
Variable cost rate and fixed cost element are calculated using the regression formula as follows:
CONTRIBUTION FORMAT
- By utilizing the results of mixed cost analysis, accountants can prepare income statements with contribution format.
- Income statements with this format classify expenses based on behavior and not by function as used in traditional formats.
- This format really helps management in planning and decision making. Example: cost-volume-profit analysis, performance measurement, segmented reporting, dan lain-lain.
Contribution Approach (cost organized by behavior)
Sales ………………………………………. $ 12,000 Less variable expenses: Variable production ………………….$ 2,000 Variable selling …………………… .. $ 600 Variable administrative …………….$ 400 Contribution margin Less fixed expenses: Fixed production ……………………$ 4,000 Fixed selling ……………………….. $ 2,500 Fixed administrative ……………… $ 1,500 $ 3,000 $ 9,000 $ 8,000 $ 1,000 Net income
Traditional Approach (cost organized by function)
Sales …………………………………………….. $ 12,000 Less Cost of ……………………………….. goods sold 6,000 $ 6,000 Gross Margin Less operating expenses: Selling ……………………….. $ 3,100 Administrative ……………… $ 1,900 Net income $ 5,000 $ 1,000
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