# 商科代写：成本函数步骤

Under quantitative analysis technique, which six steps are taken to make an estimate about a cost function? Briefly explain each step and the logic behind it in your own words. Refer to at least two sources (other than your text book) in your answer and provide a complete reference of the sources in your assignments.Answer Step 1: Choose the dependent variableThe total cost which is required to be predicted is the dependent variable in this case. Generally referred to as Y in the equation of Y = a + bX.Step 2: Identify the independent variable, or cost driver. X is the independent variable in the equation whose value would change the value of the Y in the equation. In the equation the term a is the Y intercept or the fixed cost. And b is the slope of the line or the variable cost per unit (Horngren, et al., 2011). Step 3: Collect data on the dependent variable and the cost driver. Data collection is the next step as the relevant costs are to be classified either as variable cost or fixed cost.

Variable cost would be that which keeps on changing value with increase or decrease in costs. Fixed cost is the constant portion. Step 4: Plot the data. Data can be plotted in a high low method or thorough a least square method. Plotting of the data helps in identifying the distribution of the total costs. Step 5: Estimate the cost function. Cost function estimation is established once the relevant cost is established. For example, if the fixed cost is found to be \$20,000 under the high-low method and the unit variable cost is \$.6 then the resultant equation would be:Y = 20,000 + .6X.With this equation the total cost can be established or estimated for a given level of equation. Step 6: Evaluate the cost driver of the estimated cost function. The cost driver or the independent variable shall be evaluated from time to time as the value might change dependent upon the market condition. This would help in the estimation of any probable reduction and reassessment (Lanen, 2013).