Cost Descriptions Paper
University of Phoenix
MBA/503 – Introduction to Finance and Accounting
The intent of this informative paper is to provide the HR Manager with an understanding of making effective budget decisions. All levels of management should have clear and full knowledge of basic accounting language in order to grasp the concepts of the various accounting terms such as 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).
In essence, having the knowledge of various terms used to describe costs will help this HR Manager create effective decisions for its company.
Cost Descriptors Paper
The purpose of this paper is to help the human resource manager understand current budget decisions and to identify various terms used to describe cost. The term cost can be defined as an amount to be paid or it as a requirement for a payment to purchase a product or a service. In this paper, I will describe several terms relating to cost including fixed, variable, indirect, direct, sunk costs as well as describe incremental costs and opportunities cost and provide examples of each.
The term fixed cost relatively includes all costs that do not vary with activity for an accounting period. In other words, fixed costs are known as costs that all companies must pay regardless of their sales or production levels. The costs are unmovable and must be paid each month or year without exception. For instance, I wanted to re-open a skating rink in a building that was for lease. In doing research on the building and writing out a preliminary budget to get an idea of how... [continues]
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