Cost descriptors Dys Singa University of Phoenix MBA 503: Introduction to Finance and Accounting

Cost Descriptors MemoTo: All Human Resource ManagersFrom: Jane Doe MBACC: Jim Jones CFODate: April 29, 2008RE: Cost DescriptorsAt the work meeting, it was apparent that our Human Resource Managers (HRM) lack the basic intimacy of the invoice court descriptors terminology and concepts. The use of good equal accounting techniques in accordance with the gener solelyy accepted accounting principles (GAAP) regulations is mandatory for accurate income measurement and inventory valuation. It is imperative that all HRM understand how the organizations budget expenditures are affected by unhomogeneous operational cost. In order to facilitate effective foretaste and business decision-making this memo will define the key costs equipment casualty referred to as fixed, variable, direct, indirect, sunk, marginal, total costs, actual, and opportunity costs. Extype Ales of these cost terms will be given.

Cost accounting is mandatory for efficient management decision-making, planning, evaluation, and control through cost reduction and better profitability. In the production of products and services, costs are assigned at each level of output and are tracking, recording and examined to jell the value of inventory, and the cost of products and services sold. These costs are reflected in the purchase of materials from outside suppliers and the combined cost of in sign materials and the production process.

Fixed CostThe most basic accounting cost term is referred to as fixed costs (FC).



FC are comparatively constant operating costs that remain on the end sheet or income statement from month to month disregardless of the production volume or sales level (McConnell & Brue, 2004, chap 22. p.32). In the short run, FC are outside of a business manager?s span of control. FC reflect the fiscal investment made during a business?s long commitment, the business has fixed assets considered un-resalable. Examples of fixed costs include redress premiums, interest on debts, loan payments, a portion of derogation on...

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