Reference no: EM133392337

Question: Business managers need to understand the various types of costs that businesses encounter. Not all types of costs behave the same way. Some costs increase and decrease in direct relationship to the amount of product produced, while other costs have no direct relationship to production. This discussion will analyze the behaviors of various costs, using Levi Strauss' operations as a point of reference.

It is important to thoroughly understand the concept of costs and how they react in order to do managerial accounting analysis. Some costs are directly related to producing a product or service, while others are necessary for general business operations. Some costs fluctuate based on the sales volume, while others remain the same even if no business is conducted. However, all types of costs an organization incurs have to be covered by the revenue earned. Classifying expenses into types of costs and understanding the effects those costs have on sales, provides management with the information needed to make operational decisions.

Watch Introduction to management accounting
Watch Variable costs
Watch Fixed costs
Watch Mixed costs in Managerial Accounting
Watch Direct vs. indirect costs
Watch 3 types of manufacturing costs (direct materials, direct labor, manufacturing overhead)
Watch Product costs in manufacturing (aka inventoriable costs)
Discuss the various types of costs and cost behaviors in this discussion forum.
Develop a comprehensive list of costs and costs behaviors.
Use the products at Levi Strauss, to provide a reference point to help identify types of costs and cost behaviors.