April 08, 2002

Rakibur Rahman Khan
Course instructor
School of Business,
Independent University,
Baridhara, Dhaka.

Dear Sir,

It is my immense pleasure to submit my class project on various costs concept, as you asked me to prepare and submit as a requirement of Accounting-202 program. The name of my project is " The role of various cost concepts in decision–making process "

I have tried my best to compile the pertinent information as comprehensively as possible. And if you need any further information, I will be obliged to assist you.


Thanking you,
Md.Sakil Siddique
ID: 0010005

 

Decision making is central to the management of an enterprise. The manager of a profit making business has to decide on the manner of implementation of the objectives of the business, at least one of which may well relate to allocating resources so as to maximize profit. All organizations, whether in the private or the public sector, take decisions, which have financial implications. Decisions will be about resources, which may be people, products, services, or long term and short term investment. Decisions will also be about activities, including whether and how to undertake them. Where the owners are different persons from the manager (for example, shareholders of a company as separate persons from the directors), the managers may face a decision where there is a potential conflict between their own interests and those of the owners. In such a situation cost considerations may be evaluated in the wider context of the responsibility of the managers to act in the best interests of the owners.

The name of my project is " The role of various cost concepts in decision–making process " In this assignment I am trying to define the cost first then show how they are playing role in different situation. The costs that I discuss about are as follows:

Manufacturing costs
Non-manufacturing costs
Fixed costs
Variable cost
Absorption costing
Variable costing
Opportunity costs
Sunk costs
Product costs
Period costs
Differential costs
Standard costs
Direct cost & Indirect cost
Mixed cost.