Share
Explore BrainMass

# Cost driver analysis.

See attachment for sample of graph and graph the month of April figures, please explain
1. why you use the method you choose
2. Are the cost more correlated with out units production or set up?

Units Produced Cost Driver

Month Units Produced Production Cost

February 1950 \$14900
March 2050 \$14950
April* 800 \$6500
May 2250 \$22500
June 2650 \$16000
July 2750 \$15500
August 3000 \$16500
September 3500 \$17500
October 4200 \$18000
November 5500 \$19500
December 5750 \$23500
January 5850 \$24000
February 6000 \$25500

Number of Setups Cost Driver

Month Number of Setups Production Cost

February 1500 \$14800
March 1700 \$15000
April* 400 \$7,000
May 2100 \$15500
June 2200 \$22000
July 2500 \$16000
August 2750 \$17500
September 3000 \$18000
October 3500 \$18500
November 4000 \$20000
December 4200 \$21000
January 5000 \$23500
February 6000 \$26550

Driver = Setup or Unit

3. Explain how you treated the April data.
4. Review regression analysis. Is this method more or less precise then those we used in this task? Why?
5. Which method would you recommend to management?

#### Solution Summary

solution contains explanation about various method of cost driver analysis .

\$2.19