Type of cost based on its function :

1. Production cost (DM, DL, FOH)

2. General & administrative expense
3. Marketing expense

Type of cost based on its behaviour :

1. Variable Cost (VC)
2. Fixed Cost (FC)

Total cost = VC + FC

1 unit product needs 2 kg DM @$3 = $6

10 unit = $60 VC
100 unit = $600 FC
2 unit = $12
3 unit = $18
0 unit = $0

rent cost for warehouse / month = $1.000

Capacity of warehouse = 40.000 kg

Month Storage (kg) rent cost per kg

Jan 40,000 1,000 0.03
Feb 10,000 1,000 0.10
mar 25,000 1,000 0.04
apr 10 1,000 100.00
may 39,999 1,000 0.03
jun 40,300 2,000

Co ABC is preparing budget for year 2, but the management accountant doesn’t hav
Estimated MH will be used in year 2 is 50.000 MH, how much estimated maintenance
Co ABC is trying to make relationship between Machine Hours (MH) activity and Mai
Data in Company ABC in the first year of operation as follows :

Month MH MC Method 1 :
Jan 4,000 125,500 High & Low Point metho
Feb 3,900 122,400
Mar 2,800 89,000
Apr 2,900 92,500 High
May 1,800 59,000 Low
Jun 1,700 56,000
Jul 3,500 110,000
Aug 3,300 104,000 b = VC / MH = $69500/230
Sep 2,950 94,400
Oct 3,459 109,700 High :
Nov 3,333 105,900 125.500 = a + (30,22 x 4.0
Dec 2,777 89,300 a=
36,419 1,157,700
Average 3,035 96,475 y = 4630,43 + 30,22x

y = a + bx Budget for year 2 :

y = total MC y = 4630,43 + (30,22 x 50
a = fixed cost

Example in electricity :
FC per month = Rp 100.000
Cost / kwh = Rp 200
In January, usage of electricity = 2900 kwh
Total cost = 100.000 + (200 x 2900) = 680,000
y = 100.000 + 200x

Method 2 : Scattergraph method

Method 3 : Least square method (metode kuadrat terkecil)

b = VC
xi = MH
 x = average MH
yi = MC
y = average MC

(xi) (yi)
Month MH MC (xi-x) (yi-y) (xi-x)(yi-y)
Jan 4,000 125,500 965 29,025 28,011,544
Feb 3,900 122,400 865 25,925 22,427,285
Mar 2,800 89,000 - 235 - 7,475 1,756,002
Apr 2,900 92,500 - 135 - 3,975 536,294
May 1,800 59,000 - 1,235 - 37,475 46,278,502
Jun 1,700 56,000 - 1,335 - 40,475 54,030,752
Jul 3,500 110,000 465 13,525 6,290,252
Aug 3,300 104,000 265 7,525 1,994,752
Sep 2,950 94,400 - 85 - 2,075 176,202
Oct 3,459 109,700 424 13,225 5,608,502
Nov 3,333 105,900 298 9,425 2,809,435
Dec 2,777 89,300 - 258 - 7,175 1,850,552
36,419 1,157,700 171,770,075
Average 3,035 96,475
(x) (y)

b = vc = 30.19

y = a + bx
96.475 = a + (30,19 x 3035)
a= 4,843.36

y = 4843,36 + 30,19x
Cost Volume Profit (CVP) Analysis

Data in company ABC during Jan 2019 as follows : per unit

Unit sold 3,000
Sales revenue 60,000 20
Total VC 36,000 12
Fixed Cost 25,000 8

How many unit must be sold to be BEP?

Total revenue - total cost = profit

total revenue = $60.000 60,000

Total cost = 25.000 + 36.000 = 61,000
Loss - 1,000

BEP :
total revenue - total cost = 0
20Q - 25.000 - 12Q = 0
8Q = 25.000
Q = 25.000 / 8 = 3,125 unit

Formula BEP in unit = FC / CM per unit

BEP in sales = 3125 unit x $20 = 62,500

Formula BEP in sales = FC / CM ratio = 25.000 / 40% = 62,500

 In unit In total
same change
change same

ntant doesn’t have any data related to behaviour of cost.

ated maintenance cost??
H) activity and Maintenance Cost (MC).
 Low Point method

MH MC
4,000 125,500
1,700 56,000
2,300 69,500

/ MH = $69500/2300 = 30.22

Low :
0 = a + (30,22 x 4.000) 56.000 = a + (30,22 x 1.700)
4,630.43 a= 4,630.43

0,43 + 30,22x

t for year 2 :
0,43 + (30,22 x 50.000) = 1,515,500
(xi-x)^2
931,386
748,369
55,186
18,203
1,525,019
1,782,003
216,303
70,269
7,211
179,847
88,854
66,521
5,689,169
 %

100%
60%
Contribution margin (CM) 40%
2 x 1.700)
Company XYZ is new company that has been running for 1 year.
The electricity cost during 12 months (4 quarters) in 2016 are as follows :
(Notes : electricity cost is triggered by Machine Hours)

Month Electricity cost Machine Hours (MH)

Q1 23,200 1,000
Q2 23,900 1,200
Q3 23,500 1,150
Q4 25,900 1,600

Company will prepare a budget for 2017 and needs the data about the behaviour of c
Company needs separating fixed and variable cost.

Required :
Determine Fixed and Variable cost using :
a. High & Low Point method
b. Method of least square
he behaviour of cost.
No. 1
Actual unit sold 2,500
Selling price per unit 200
Variable cost :
DM per unit 20
DL per unit 30
FOH per unit 15
General, admin, selling per unit 15
80
Fixed cost 240,000

Determine BEP in unit & sales