I am trying this again. So far, I've gotten an F and a D. I need an A please! I'm attaching the PowerPoint for assistance. Please do the work in Word as he instructs but please send me your excel sheet too so I can practice. Thank you so much!

ACT 5140 - Accounting for Decision Makers CHAT 5 - COST BEHAVIOR, COST ESTIMATION, & ACTIVITY ANALYSIS ACT 5140 CHAT 5 WOBBY Chat Outline Cost behavior Cost estimation Activity analysis ACT 5140 CHAT 5 WOBBY Cost Behavior Introduction How does a cost change (if at all) when activity changes? Traditional approach is to define activity in terms of units or volume of service Alternative approach is to define activities more broadly Used to predict costs at various activity levels Used to assess risk (operating leverage) ACT 5140 CHAT 5 WOBBY Cost Behavior Patterns Focus on TOTAL costs (not unit) Variable costs Fixed costs Mixed costs (Semi-variable) Step costs Classification depends on time frame, the activity, & relevant range of the activity ACT 5140 CHAT 5 WOBBY More Detail on Fixed Costs This is related to our budgeting discussion Discretionary fixed costs (managed fixed costs) - decided on as part of budget process, so can be changed in short run Committed fixed costs (capacity costs) - required to maintain current service or required under law / contract ACT 5140 CHAT 5 WOBBY Cost Estimation Using past data to identify cost behavior and predict future costs Unsophisticated methods such as high-low method and scatter diagrams More sophisticated methods such as simple regression and multiple regression Be aware of impact of learning and changes in technology Also be aware of coincidences ACT 5140 CHAT 5 WOBBY High-Low Method Use 2 data points to estimate variable and fixed costs Estimated VC ratio = Change in Operating Costs / Change in Sales Estimated fixed costs = Total costs - Estimated VC Predict future costs based on estimated VC ratio, expected sales, & estimated fixed costs ACT 5140 CHAT 5 WOBBY High-Low Example - Step 1 2013 Net Sales Total Operating Costs Change in Op Costs Change in Net Sales Estimated VC ratio 2012 $61,09 $74,452 3 $54,79 $65,899 8 $11,101 $13,359 83.10% ACT 5140 CHAT 5 WOBBY High-Low Example - Step 2 2013 Net Sales $74,452 Total Operating Costs $65,899 Estimated VC (83.10%) $61,868 Estimated FC $4,031 ACT 5140 CHAT 5 WOBBY 2012 $61,09 3 $54,79 8 $50,76 7 $4,031 High-Low Example - Step 3 Actual 2014 Net Sales Estimated VC (83.10%) Estimated FC Estimated Total Operating Costs Actual 2014 Total Operating Costs Dollar Error Percentage Error $88,988 $73,947 $4,031 $77,978 $77,850 $128 0.16% Amazon.com ACT 5140 CHAT 5 WOBBY Regression Analysis Using statistical analysis to estimate costs Uses more data than high-low method Simple regression - one independent variable (predictor) Multiple regression - multiple independent variables (predictors) Diagnostic statistics allow us to statistically evaluate the equation for accuracy ACT 5140 CHAT 5 WOBBY Activity Analysis In some instances costs fluctuate based on something other than units or volume Examples: Set-up costs, billing, and design costs Predicting these costs based on units or volume is NOT ACCURATE! ACT 5140 CHAT 5 WOBBY Activity Hierarchy Unit-level activity - activity performed on each individual unit (variable cost) Batch-level activity - activity performed once per batch or order Product-level activity - activity performed for each product / service / customer, not individual batches or units Facility-level activity - activity performed to maintain capacity (fixed cost) ACT 5140 CHAT 5 WOBBY ACT 5140 - Accounting for Decision Makers HW #4 - Chapter 2 Directions: Please submit your work in Word format only. You can submit an Excel file to support calculations, but please \"cut and paste\" your solutions into the Word file. Be sure to show how you did your calculations. Also, please be sure to include your name at the top of the first page of your file. The assignment is due by 6 PM on February 1. Please run spell check and proofread your answers. If you have any questions, please e-mail me at dwobby@nova.edu. Good luck! Question #1 a) A company estimates that its total cost to send out invoices, receive payments, deposit the payments, and update accounting records was $10 per sale in 2014. In 2014, there were 10,000 sales and fixed costs of $60,000. In 2015, the company expects total fixed costs and variable costs per unit to be the same as in 2014. If the company budgets 10,500 sales in 2015, what are the expected total costs and expected costs per unit for 2015? b) Assume the same facts as in part a, except the company expects 9,500 sales in 2015. What are the expected total costs and expected costs per unit for 2015? Question #2 a) A company estimates that its total cost to acquire materials, set up machines, and produce products is $25 per unit produced in 2014. In 2014, there were 50,000 units produced and variable costs per unit produced totaled $15. In 2015, the company expects total fixed costs and variable costs per unit to be the same as in 2014. If the company budgets to produce 52,000 units in 2015, what are the expected total costs and expected costs per unit for 2015? b) Assume the same facts as in part a, except the company expects to produce 49,000 units in 2015. What are the expected total costs and expected costs per unit for 2015? Question #3 The Tiger Company collected the following annual information on total net sales and total operating costs: Year 2014 2015 Total Net Sales $8,200,000 $8,700,000 Total Operating Costs $4,250,000 $4,450,000 In 2016, total net sales are budgeted to be $9,400,000. Using the high-low method, prepare an estimate of total operating costs for 2016, assuming total fixed costs and variable costs as a percentage of total net sales are expected to be the same in 2016 as in 2014 and 2015