Statistical Analysis in Cost Accounting? It’s Not Just For Football!

Jan 13, 2015

I live in Ohio, so yes I am a real Ohio State Fan. I have been my whole life! I know there are many people jumping on the Ohio State bandwagon and I’m ok with it because I know how much fun it can be. I had the pleasure of being at their one loss this whole year against Virginia Tech. It was the first Ohio State game I had ever been to and the whole game-day experience was exciting.

I know many people bet on the outcome of last evening’s game. The point spread was a range of 6-7 points in favor of Oregon. While there is some chance involved in betting, statistical analysis determines the odds. There are stats kept on almost every aspect of sports. I would hope those betting on the game considered some of those stats before making their bet.

statistical analysisStatistical techniques are also utilized in cost accounting. When attempting to determine a cost driver using multiple regression can be an excellent tool. This helps determine how much one activity is affected by another. If, for example, labor does not seem to affect production, then it is most likely not the correct cost driver. Continuing to guess wastes time and money. Stop guessing and continuing to do things the way they have always been. No need to gamble when using statistics. While statistics are not fool proof, your business is better off relying on valuable data rather than guessing! Statistical techniques can be a very viable part of your business. Take some time to learn more about these techniques and how they can positively impact your business.

Would anyone like to share their experience with statistical techniques in their cost accounting environment? What kind of an impact have you observed?

Categories: Cost Accounting