Ch 12: Cost Estimation

About This Chapter

Use this chapter to learn about methods and techniques for cost estimation. The lessons and multiple-choice quizzes can help you prepare for an exam, improve your grades, or boost your overall accounting knowledge.

Cost Estimation - Chapter Summary

Before organizations decide to risk a lot of money, they forecast potential costs and returns on investments using cost estimation. This chapter elaborates on how cost estimations are made, including an explanation of related methodologies and analysis strategies. Most lessons can be completed within 5-10 minutes, so you can fit your studying into even the busiest of schedules. After you complete the chapter, you'll be prepared to do the following:

  • Describe the significance of project cost management
  • Identify effective techniques for estimations and planning
  • Define key techniques for project cost management
  • Examine the uses of the variance analysis model
  • Explain the formula for high-low method accounting
  • Use a scatter graph to estimate costs
  • Employ regression analysis to achieve certain goals

7 Lessons in Chapter 12: Cost Estimation
Test your knowledge with a 30-question chapter practice test
What is Project Cost Management? - Definition & Importance

1. What is Project Cost Management? - Definition & Importance

Project cost management is all of the activities that ensure a project stays on budget. In this lesson, we'll look at the steps in project cost management and its importance in business.

Project Cost Management: Planning & Estimation

2. Project Cost Management: Planning & Estimation

Project cost management includes activities to estimate, monitor, and control project costs. In this lesson, we'll look at the two elements of project cost management: estimating and planning.

Project Cost Management Techniques

3. Project Cost Management Techniques

Project cost management techniques are designed to ensure a project stays on budget. In this lesson, we'll look at the different techniques used in estimating, monitoring, and controlling project costs.

Variance Analysis Model in Accounting

4. Variance Analysis Model in Accounting

Budgets and variances are useful, but if you really want to see just how effective your organization is at making use of that information, then you're going to want to learn about variance analysis modeling.

High-Low Method Accounting: Formula & Examples

5. High-Low Method Accounting: Formula & Examples

The high-low method is one type of cost-volume analysis used in accounting. This lesson describes how it is used and explains the formula for quickly computing an estimated cost per unit.

How to Estimate Costs Using the Scatter Graph Method

6. How to Estimate Costs Using the Scatter Graph Method

A scatter graph is a graph that shows how a cost differs at various activity levels. From a scatter graph, you can develop a mixed cost equation that will enable you to estimate the amount of the cost for future periods.

Using Regression Analysis in Business

7. Using Regression Analysis in Business

Statistical analyses and models, like regression analysis, can be extremely helpful when businesses need to forecast their financials and product demand. In this lesson, we'll learn how regression analysis can help accomplish these goals.

Chapter Practice Exam
Test your knowledge of this chapter with a 30 question practice chapter exam.
Not Taken
Practice Final Exam
Test your knowledge of the entire course with a 50 question practice final exam.
Not Taken

Earning College Credit

Did you know… We have over 160 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? Study.com has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Support