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Cost Descriptors

MBA 503 / Introduction to Finance and Accounting

Oct. 15, 2007










In the following paper the following accounting cost descriptors will be explained. They are fixed cost, variable cost, direct cost, indirect cost, sunk cost, and other cost that are associated with the listed cost.
Fixed costs are those cost that remain on the balance sheet or income statement because they are constant. For example: rent, property taxes, depreciation, and upper management salaries are considered fixed cost. Fixed Costs are those “costs that remain the relatively constant regardless of the volume of operations.” (Block,652). Fixed assets are also considered fixed costs. Fixed assets are those items that are owned by the company and that would not be considered for resale. Depreciation is “the allocation of the initial cost of an asset over its useful life. The annual expense of plant and equipment is......

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Approximate Word Count: 457
Approximate Pages: 2 (250 words per double-spaced page)

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