Cost Descriptors Paper

As a human resource manager for a manufacturing company, is my task to understand the current budget and how address affects this budget. terms advise be delineate as an amount paid or required in payment for a purchase. Cost locoweed be classified in many ways: fixed, variable, direct, confirming and sunk just to name a few. Fixed cost were mostly associated with administrative cost. Fixed costs include items standardised rent, utilities and insurance. Variable cost ar cost that vary like a shot with the number of products produced (Ward, 2006). Direct costs are identified with a specific product, department or activity. Indirect cost bottom not be identified with a specific product.

The Cost ConceptCost concepts have developed according to the needs of accountants, economists, and engineers. Accountants have define cost as ?an exchange price, a forgoing, a surrender made to secure benefit. In financial accounting, the forgoing or sacrifice at date of acquisition is represented by a current or future diminution in cash or other assets?. (Sprouse and Moonitz, 1962). Frequently the term cost is used synonymously with expense.



However, an expense may be defined as a measured outflow of goods or serve, which is matched with revenue enhancement to determine income, or as: ?the decrease in dough assets as a result of the use of economic services in the creation of revenues or of the imposition of taxes by governmental units. Expense is measured by the amount of the decrease in assets or the increase in liabilities related to the production and rake of goods and the rendering of services?expense in its broadest sense includes whole expired costs which are deductible from revenues (Ibid., p.49).

To contrast cost and expense, consider a purchase of raw materials for cash. Because net assets are unaffected, there is no expense. The firm?s resources are simply...

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