Business Accounting For Non Specialists

1367 Words Nov 20th, 2014 6 Pages
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 relationship of the purpose of use within a firm. The most frequent and important functions of management accounting are Planning, Decision making and Control (Weetman, 2011, p. 433). Each of these functions are related to certain costs classifications. Any particular cost or item can be included on more than one of these classification, depending on the purpose they are being used (Weetman, 2011, p. 455).
Costs are, most commonly, classified by three types, Fixed Costs and Variable Costs, Direct Costs and Indirect Costs, Product Costs and Period Costs. Firstly, according to the costs behaviour they are classified in fixed and variable costs. Fixed costs are constant within the relevant range during the production process. For example, the rent for…
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