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# Introduction

This course is designed to provide you with a solid understanding of the principles and practices of cost accounting.

Figure 1

Cost accounting enables managers to understand the true costs of products, services and processes in order to help them make informed decisions, control costs and improve the overall performance of the organisation. Throughout this course, you will explore various aspects of cost accounting. You will learn that to distinguish between fixed costs and variable costs allows for a range of important decisions in any business. An understanding of basic cost behaviour is essential to the work of management accountants. This course will cover the foundations of cost accounting and your ability to apply this knowledge.

In the final section you will look at the concept of environmental management accounting and analyse the impact of environmental costs and their implications for management accounting.

To help you plan your studies, this table outlines the activities you will be working on in this course. Please note that you will also need to allow time for reading the linked material and reflecting on what you have learned. To help you manage your workload, the approximate time to complete each activity is provided.

## Table 1 Course activities breakdown

| Activity | Description | Duration
--- | --- | --- | ---
| Activity 1 Cost classifications | Answer the questions | 10 minutes
| Activity 2 Cost changes | Answer the question | 5 minutes
| Activity 3 Calculation of the unit cost | Calculate unit cost | 15 minutes
| Activity 4 Direct or indirect costs | Answer the questions | 5 minutes
| Activity 5 Direct or indirect costs – Nancy’s jewellery | Answer the questions | 5 minutes
| Activity 6 Decision-making information | Answer the questions | 15 minutes
| Activity 7 Performance information | Answer the question | 5 minutes
| Activity 8 Cost classification activity | Answer the question | 5 minutes
| Activity 9 Internal and external pressures on organisations to be sustainable | Share your thoughts | 20 minutes
| Activity 10 The role of EMA | Vote in the poll | 10 minutes
| Activity 11 Understanding and applying environmental management accounting | Read and write a definition | 15 minutes
| Activity 12 Drawbacks of traditional management accounting | Answer the questions | 15 minutes

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.

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OpenLearn - Fundamentals of cost accounting and environmental management accounting
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