Management Accounting Costing and Budgeting

I. Identify and classify different types of cost incurred in Foxwood Company with an appropriate cost classification
There are many concepts of cost in an organization. Costs also are used in different business applications, such as financial accounting, cost accounting, budgeting, capital budgeting, and valuation. Consequently, there are different ways of categorizing costs according to their relationship to output as well as according to the context in which they are used. Following this summary of the different types of costs are some examples of how costs are used in different business applications.
The two basic types of costs incurred by businesses are fixed and variable costs. Variable costs and fixed costs represent the total amount of costs for the company. This is important to know because the variable costs are going to determine how much we spend to make our company work as opposed to fixed costs which we have to pay anyway. * Fixed costs: are costs that will be the same no matter what else changes with the company. Examples of fixed costs would be rent, property tax, insurance and interest expense, depreciation, operation costs, etc. These fixed costs remain constant in spite of changes in output.
According to the scenario, fixed costs are as below: * Plant-leasing costs: they are costs that company has to spend monthly or quarterly, regardless to the company could make profit or not. * Depreciation-plant equipment: It is cost that company has to be incurred despite company are producing or not. * Property taxes on plant equipment: the amount that company has to pay as prescribed by law. * Fire insurance on plant equipment: whether company is being operated or not, this is the amount that are paid to prevent the loss of plant equipment when fire happens. So that it is not affected by the volume of product units. * Operation costs – Marketing promotions, Marketing salaries, Distribution costs and Customer-service costs: they