List and Briefly Describe the Six Steps in Estimating a Cost

question 132

Essay

List and briefly describe the six steps in estimating a cost function under quantitative analysis.

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Definitions:

Raw Materials Cost

The total expense associated with the raw materials used in the production of goods or services.

Administrative Expense

Costs related to the general administration of a business, such as salaries of executive officers and costs of general services.

Estimated

An approximate calculation or judgment of a value, number, or quantity, based on limited information.

Selling and Administrative Expense

Overheads related to the selling of products and the management of an organization.