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 can be defined as an amount paid or required in payment for a purchase. Cost can be classified in many ways: fixed, variable, direct, indirect and sunk just to name a few. Fixed costs were mostly associated with administrative cost. Fixed costs include items like rent, utilities and insurance. Variable cost are cost that vary directly with the number of products produced (Ward, 2006). Direct costs are identified with a specific product, department or activity. Indirect cost can not be identified with a specific product.
Cost Descriptors
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 can be defined as an amount paid or required in payment for a purchase. Costs are decreases in assets or increases in liabilities. Accounting is concerned with providing detailed information about the cost of producing something and carrying out business operations. Manufacturing cost can include fixed, variable, overhead, direct and indirect cost.
Originally cost were considered to be fixed, because some cost tended to always stay the same. Fixed cost were mostly associated with administrative cost. Fixed cost include items like rent, utilities and insurance. For example a manufacture wants to lease a building to make their product. The manufacture must pay a monthly lease fee of five hundred dollars a month. The space for this manufacture is fixed, because the rent ...