What would you consider to be a predictive analytics technique in management accounting? Multiple Choice Breakeven Level in Sales Computation of Product Sales in Prior Period Sales Forecasts based on Time Series Analysis Computation of Rate Variances
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Step 1: Define predictive analytics in management accounting as using historical data and statistical methods to forecast future outcomes. Show more…
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Required: Identify each of the following confirmatory analytics techniques as either predictive or prescriptive analytics. Predictive Analytics or Prescriptive Analytics? Example of Analytics Technique Performed Analysis of whether to manufacture or outsource the manufacture of products Classification of customer segments Cash flow analysis for payoffs of capital investments Sensitivity of profits to changes in fuel costs Time series analysis of product demand
James K.
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BE 8-5 (LO 8.1, LO 8.4, LO 8.5, LO 8.6, LO 8.7) Match the analytics type (descriptive, diagnostic, predictive, or prescriptive) and branch of accounting (financial, managerial, audit, or tax) to the analytics technique used. Analytics Technique Used: 1. Classification to accept or reject audit clients 2. Time series analysis to forecast sales 3. Common-size financial statements 4. Regression to assess the company's cost structure (determine fixed costs and variable costs) 5. Goal-seek analysis to identify the break-even point 6. Sequence checks assessing missing transactions 7. Vertical analysis for investors to compare a company to its peers
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