Discussion Questions Business & Marketing Essay Paper

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Institutional Affiliation
Response Paper
Question A: Cost Classification
Cost classification is described as complete and transparent concepts of separation of cost in a different sector. Cost classification is vital in a business organization. Classification cost includes the following:
1 Direct and Indirect cost
Costs are the total amounts that are paid out for goods or services offered or purchased. These expenses can be either a direct cost or indirect costs which are closely related to the business activities. Direct expenses are cost which is related to all business operations. They are directly related to the product being produced or the kind of service being offered or sold out. These direct costs include:
* The wages: This is one of the major examples of direct cost. They are described as regular payment for work done or services offered. Usually, this kind of expense is paid weekly or daily basis.
* The organizational factory rent: this is expenses that are sold out to settle for warehouses or business rooms where the services are being carried out.
* The cost of the materials used in the industry: this is the cost pf the raw materials which are used in the processing activities.  
Indirect costs are not directly related to the business organization (Abdelaty, et al 2016). They are used to run the business. Examples of indirect costs include:
* Salaries: this is expenses used to pay the workers carrying out the services in the business firm.
* Printing of the paperwork and the stationeries: this is the cost used to purchase all the paperwork in the offices including pens and printing papers. The telephone bills are another example of indirect cost which is used in making business communication from one office to the other.
2 Reasonable, Allowable, and Allocable Costs
The monitoring firm award ensures that the expenses are reasonable, allowable, or allocable to a genuine project which is sponsored according to the budget and guidelines.
The process of assigning business cost or group cost to more than one objective is known as allocation. Allocable costs are used to learn this process. Examples include:  
Technical supplies in the business organization: this is identified as allocable if one way or the other benefits the innovation project being carried out or the organizational investment activities. For these costs to be assigned there should be clear evidence of how the organization will benefit. 
Maintenance and repairs: this amount of money assigned to carry all forms of repairs and maintenance of the organizational machines, building, or even motor vehicles in the company. This is delegated to the organization police on how this fund should be distributed in all sectors in the firm. 
Allowable costs in a business firm are expenses appearing in a contracted service or product. These costs are usually set in relevant federal regulations, organizational policy, and the sponsorship agreement. Examples include:
The consultant services: this is individuals who are retained in the organization for the sake ...