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Cost Descriptors Abstract As a Human Resource manager for a manufacturing company, it is their job to understand the current budget and how cost affects this budget.
Cost Descriptors Cost Descriptors Paper Cost Descriptions Paper In planning the organization's yearly budget, all levels of management should fully understand the
Cost Descriptors Paper Introduction It is imperative for the Human Resource Manager of any firm to have an understanding of the company budget and how it is affected
Cost Descriptors Memo Running Head: Cost Descriptors Memo Cost Descriptors Memo Memo To: Human Resource Manager From: Date: 5/11/2008 Re: Understanding descriptors
Submitted by matricia1228 on October 20, 2007
Category: Business
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Cost Descriptors Paper
Cost Descriptions Paper
In planning the organization's yearly budget, all levels of management should fully understand the key accounting terms. Cost accounting outlines to the determination of a product, process or service costs. A subset of managerial accounting, cost accounting relates primarily to the accumulation and determination of product, processes and service costs for the primary purpose of income measurement and inventory valuation in accordance with generally accepted accounting principles (Marshall, 2003). In essence, practical application of cost accounting requires understanding and management of costs at each stage of an organization.
The most basic among accounting terms are fixed costs which are defined as expenses that do not vary depending on production or sales levels, such as rent, property tax, insurance, or interest expense. "Fixed costs are the costs of the investment goods used by the firm, on the idea that these reflect a long-term commitment that can be recovered only by wearing them out in the production of goods and services for sale" (Drexel University, 2006, p.1).
The opposite of fixed costs are variable costs described as business expense that varies in proportion to the quantity of goods sold or manufactured, such as packaging materials or product components. Variable costs tend to decline on a per unit basis as the quantity manufactured or sold increases, due to economies of scale. For example, a marketer might have to spend increasingly greater amounts on advertising and promotion to sustain an artificially high demand level (Answers, 2007). Organizational examples of variable costs are labor costs. The idea is that labor is a much more flexible resource. People can change from one task to another flexibly (whether within the same firm or in a new job at another firm), while machinery tends to be designed for a very specific use.
Fixed and variable...
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