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# Summary

This course explored why organisations need to know about costs and why they need costing systems. You learned about various possible classifications for costs as well as the nature of production and non-production costs. You also learned about the importance of understanding cost behaviour in terms of fixed versus variable cost elements. The importance of classifying costs as direct or indirect was also covered. Perhaps the overriding message of this course concerns the need for people to be able to describe costs as fixed or variable and so on if they are to be able to understand cost behaviour in relation to goods or services provided. Lastly, in this course we explored the basic principles of environmental management accounting and the role of management accountants in addressing environmental issues, including some environmental management accounting techniques.

You should now be able to:

- describe the nature and behaviour of fixed, variable, stepped fixed and semi-variable costs and interpret graphs showing the behaviour of different types of costs
- explain why costs need to be classified as direct/indirect for planning and decision making and why organisations need to know the costs of products, processes and services
- distinguish between cost objects, cost units and cost centres and discuss the nature of production costs in terms of materials, labour and overheads
- explain the nature of different non-production costs, apply the principles of environmental management accounting and analyse the impact of environmental costs and their implications for management accounting.

This free course is an adapted extract from the Open University course B253 and related to the Open University qualification BSc (Honours) Accounting and Finance.

Now you’ve come to the end of the course, we would appreciate a few minutes of your time to complete this short end-of-course survey.

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OpenLearn - Fundamentals of cost accounting and environmental management accounting
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