Cost Terminology

Descriptive Essay # 107211

Accounting
Business > Accounting

Cost Terminology

Explores the terminology used to describe various types of costs.

900 words () | 6 sources | APA | 2007 United States

Paper Summary:

This paper explains that a variety of terms are used to identify costs within the business environment. The author describes each of these terms, including fixed, variable, direct, indirect, sunk, total and overhead, which categorize specific data used to complete a financial analysis. This data can then be used to identify the success and failure of a company.

From the Paper:

"Within the business industry, a common example of sunk costs is found in the research and development department. Financial investments are made in this department with the intention of furthering the success of the company. However, if the investment is specifically intended for one particular element, the investment may be a sunk cost. In this situation, the costs cannot be recovered if the investment in the research and development of a specific product is not successful."

Sample of Sources Used:

Block, S. and Hirt, G. (2005). Foundations of Financial Management. New York: The McGraw- Hill Companies.
Ernst, R. (2006). Indirect costs and cost-effectiveness analysis. Value in Health, 9 (4), 253-261. Retrieved August 10, 2007, from EBSCOhost database.
Fogarasi, A. (2007). What time of day do you start making money? Pro, 19 (2), 32-35. Retrieved August 7, 2007, from EBSCOhost database.
Kujal, P. and Ruiz, J. (2007). Cost effectiveness of R&D and strategic trade policy. B.E. Journal of Economic Analysis & Policy, 7 (1), 1-35. Retrieved August 11, 2007, from EBSCOhost database.
Norfleet, D. (2007). The theory of indirect costs. AACE International Transactions, 12.1-12.6. Retrieved August 10, 2007, from EBSCOhost database.