Business Accounting For Non Specialists

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THE UNIVERSITY OF DUNDEE SCHOOL OF BUSINESS: ACCOUNTING AND FINANCE AB51022: BUSINESS ACCOUNTING FOR NON-SPECIALISTS ASSESSED COURSEWORK Essay subject: “Costs may be classified in a variety of ways, depending on their nature and the information needs of management. The analysis of total costs into its behaviour elements is essential for effective cost and management accounting” Theodorou Ilias 140022413 MSc International Business and Finance In every industry or company they key factor for the management are the costs. They are measured, analyzed and reported financially and non-financially. These information are provided for both management and financial accounting. Costs are classified in a…show more content…
(Weetman, 2011, p. 457). On the other hand, variable cost are the costs that in total vary in direct proportion to changes in an activity driver (Hansen & Mowen, 2009, p. 67). Therefore, variable costs are these which is taken in consideration for decision making. For instance, in health care the cost are divided in three categories (Health Service Costs, Costs borne by patients and their families and External costs borne by the rest of the society (Robinson, 1993). Health Service Costs includes costs that can be divided in fixed costs which remain the same whatever the level of activity (heating, lighting) and variable costs which differ according the level of activity (staff time). Additionally, an Environmental Management Accounting framework was applied, at the end of the year 2000, for the Mackenzie Paper Division paper mill. This company collects monthly data on costs and this figures are includes into the annual report. Costs are classified to variable like fibre, chemicals, electricity and other energy and to fixed costs, such as salaries, maintenance supplies, clothing, operating supplies and other expenses (Gale, 2006). The second type of classification is direct costs and indirect costs and it depends on costs traceable. Direct costs or manufacturing costs are these which are associated with the manufacture of a good. They are divided in direct materials, direct
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