Acct 220 - Unit 1 Discussion 2

ACCT220-1804A-01 UNIT 1 DB2

ASHLEY STONER

JAMIE JANIS

At the newly-opened manufacturing company, you would need to know the importance of allocating costs to a product. There are four types of costs: direct costs, indirect cost, opportunity cost, and sunk cost. I think direct cost would be more suitable for your company. Direct costs are business expenses that can be directly applied to producing a specific cost object, like a good or service.

For example, let’s say you have an employee who puts together toys. The employees work is considered direct labor. He create the toys, the employee needs would, which is considered a direct material, and the employee must use wood glue, which is a manufacturer Supply( Rachel Blakely-Gray).

I chose direct costs because the expenses are directly applied to producing a product. Understanding direct calls can help you determine your product or service pricing. Indirect costs cannot be easily and conveniently tied to specific cost object. The disadvantage is indirect calls can affect the entire company, not just one product.

Impulse accountant, there’s Pacific Coast way to planning and decision-making of business activities. The major difference between sunk cost and opportunity cost is that when the organizations are making importance of strategic decisions for their future, let’s not be considered as incurred in the past and cannot be recovered. Opportunity cost would be useful in deciding the best option that must be selected in making important decisions. Both of these calls related to business planning, especially opportunity cost can be used for making crucial decisions on behalf of the organization.(Admin. July 7,2014).

Sunk costs are costs that were incurred in the past. They are Irrelevant for decision, because they cannot be changed. Opportunity cost is the profit for gone by selecting one alternative over another. It is the net return that could do realize if a resourceful put to its next best use.

When you come this refer to the opportunity cost of a resource, they mean to value of the next highest valued alternative use of that resource. If, for example, you spend time and money going to a movie, you cannot spend that time at home reading a book, and you can’t spend money on something else. If your next best alternative to seeing the movie is reading the book, and opportunity cost of seeing the movie is the money spent plus the pleasure you for go by not reading the book.( the concise Encyclopedia of economics).

Whether you hire a marketing consultant or an SEO specialist to help your business and track customers, there’s a fee involved with Services provided. Austin, a portion of the fees paid before the work is done and before you can determine whether the consultants and put makes a difference for your business. Once the money