Running head: Cost Descriptors Paper
Cost Descriptors Paper
University of Phoenix
Executive Summary
The Human Resources Department has been struggling to understand current budget discussions the following are some various terms used to describe costs (fixed, variable, direct, indirect, sunk, etc.), including examples of each. Fixed costs are the costs that do not vary with the number of goods produced. Variable costs are expenses that change in direct proportion to the activity of a business. Actual costs refer to real transactions, whereas opportunity costs refer to the alternative taken into consideration by decision makers who might want to choose the line of activity which minimize the costs. Sunk costs are investment costs incurred before a certain activity takes place which cannot be recovered by the possible sale of the asset they produced and represent barriers to exit. Direct costs are identified specifically with a particular supported venture and can be directly allocated to such actions, comparatively easily and with a high degree of precision. The costs terms described in the cost descriptors paper are viable information that should allow the HR manager understand current budget discussions.
Introduction
"Just" People Inc.
Memo
To: HR Manager
From: Anthony Smith
CC: Executive Director
Date: March 11, 2007
Re: Various terms used to describe costs
The Human Resources Department has been struggling to understand current budget discussions the following are some various terms used to describe costs (fixed, variable, direct, indirect, sunk, etc.), including examples of ...