Fundamentals of cost accounting and environmental management accounting

Introduction

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

Figure 1

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A cartoon image of a woman standing in front of a digital tablet that is taller than she is. An arrow is coming out of the tablet and pointing into a funnel. Underneath the funnel are three pound symbols.

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 [Tip: hold Ctrl and click a link to open it in a new tab. (Hide tip)] .