Question

In: Accounting

explain how account analysis is used to estimate cost.

explain how account analysis is used to estimate cost.

Solutions

Expert Solution

A method for analyzing cost behavior in which an account is classified as either variable or fixed based on the analyst's prior knowledge of how the cost in the account behaves.

In cost accounting, this is a way for an accountant to analyze and measure the cost behavior of a firm. The process involves examining cost drivers and classifying them as either fixed or variable costs. The cost accountant then uses the company's data to figure out the estimated variable cost per cost-driver unit or fixed cost per period.

When it comes to banking, account analysis takes the form of a periodic statement outlining the banking services provided to a firm. The statement is usually provided monthly and involves the display of all important account data, including the company's average daily balance and charges that the company incurs from the bank.

Please do not forget to like the answer if you find it useful. It encourages me to help the students by answering further questions.


Related Solutions

Explain how to estimate the cost of capital. In particular, explain how to estimate the equity...
Explain how to estimate the cost of capital. In particular, explain how to estimate the equity cost of capital, list two different methods to estimate the debt cost of capital, and how to calculate the weighted average cost of capital for a given debt-equity ratio.
Explain how to estimate the cost of capital. In particular, explain how to estimate the equity...
Explain how to estimate the cost of capital. In particular, explain how to estimate the equity cost of capital, list two different methods to estimate the debt cost of capital, and how to calculate the weighted average cost of capital for a given debt-equity ratio.
What is Cost-Volume-Profit analysis and how might it be used? Explain Margin of Safety and how...
What is Cost-Volume-Profit analysis and how might it be used? Explain Margin of Safety and how it is calculated. Compute the Contribution Margin and describe what it reveals about a company’s cost structure. What is Operating Leverage and how is it used to analyze changes in sales and profitability?
Explain how to estimate the cost of capital for a particular project, including the cost of...
Explain how to estimate the cost of capital for a particular project, including the cost of debt and/or the cost of equity. What makes debt or equity a better choice for a given project--or is a blend always preferable? Explain your reasoning using an example
explain how to estimate the cost of capital. How to adjust for the effect of leverage...
explain how to estimate the cost of capital. How to adjust for the effect of leverage on the cost of equity (unlevered Beta)? Should we use book or market value to determine the weights?
What is an opportunity cost? How is it used in a time value analysis? Is the...
What is an opportunity cost? How is it used in a time value analysis? Is the opportunity rate a single number that is used in all situations? Integrate Bible passages into the discussion that address the Christian worldview.
Identify the different types of strategies used in cost analysis/restaurant industry. Explain how these strategies add...
Identify the different types of strategies used in cost analysis/restaurant industry. Explain how these strategies add value to the decision making process for specific clientele base of business that purchase products or services.
Briefly describe the cost-volume-profit analysis model and discuss how it can be used. Also, briefly explain...
Briefly describe the cost-volume-profit analysis model and discuss how it can be used. Also, briefly explain the limitation of basic cost-volume-profit analysis as it relates to an organization’s sales mix
What is an opportunity cost? How is this concept used in TVM analysis, and where is...
What is an opportunity cost? How is this concept used in TVM analysis, and where is it shown on a time line? Is a single number used in all situations? Explain.
Procurement cost analysis -Describe the process of strategic/ tactical sourcing -Explain how to approach cost analysis...
Procurement cost analysis -Describe the process of strategic/ tactical sourcing -Explain how to approach cost analysis of specific category (i.e. supply chain function
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT