BCAS-2
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BANGLADESH COST ACCOUNTING STANDARDS
The Institute of Cost and Management Accountants of Bangladesh
ICMA Bangladesh, ICMA Bhaban, Nilkhet, Dhaka-1205 Bangladesh
BCAS 2
Cost Estimation
BCAS-2
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BCAS 2: Cost Estimation
Summary
Effective Date : ICMAB prepares this standard for ultimate use and adoption by every company operating
in Bangladesh at its own discretion starting from the period beginning on July 1, 2014.
Objective : The main purpose of this standard is to guide companies for understanding the behavior
of cost in different situations so that it can be measured, estimated and predicted for
proper cost management and planning. It also covers some statistical analysis of cost with
presentation and critical judgment to supplement the managerial decision making process.
Key Features :
Identifying costs in terms of behavior
Differentiating flexible, capacity-related and discretionary costs
Applying dependent and independent variables in formulation cost function
Cost prediction and forecasting base on cost formula
Application of multiple regression to identify the most appropriate cost driver
BCAS-2
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Contents
Particulars
Paragraphs
Introduction
Scope
1-3
Objective
4
Definitions
5
Standards
6-7
Recording and Reporting
8-41
Appendix
BCAS-2
BCAS 2: Cost Estimation
The standards, which have been set in bold italic type, should be read in the context of the background
material and implementation guidelines of this standard. BCAS is not intended to apply to immaterial items.
Introduction
All managerial decisions deal with choices among different activity levels. An understanding of cost behavior
underlies all decisions that rely on cost information. Managers must estimate which costs will vary with the
activity & by how much at the time of evaluating the profitability of an existing product and evaluating the
potential profit of a prospective product. In addition, understanding cost behavior provides critical insights in
the process of forecasting costs during budgeting and cash flow estimation.
Scope
1. The standard shall be applied for estimating the cost.
2. However, knowing the cost in terms of behavior is important for such estimation. Thus the standard also
brings the degree of changes in cost for its better understanding and advanced use.
3. The standard is to be followed by all public and private limited companies as defined by the Company Act
1994.
Objective
4. The objective of the standard is to provide guidance on the nature, purpose, and approaches to cost
