Question
A short course was held recently to introduce non-financial executives to management accounting and finance. On the opening day one delegate observed: (1) I have
A short course was held recently to introduce non-financial executives to management accounting and finance. On the opening day one delegate observed: (1) I have no trouble with the terminology direct costs, also called variable costs, are the ones that are controllable, whereas indirect costs or overheads, also called fixed costs, are uncontrollable. (2) Later the purposes of management accounting systems were described as exclusively directed towards costing and management control. Required: (a) Explain the terms used in statement (1) and indicate with reasons whether you agree with it. You may use examples to illustrate the points you make.(b) Discuss whether statement (2) satisfactorily describes the purposes of management accounting systems.
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