Module 2 – Application and Analysis: Direct and Indirect Costs in a Real-World Business

Objective: To enhance your understanding of direct and indirect costs and their impact on business decision-making, you are to analyze a real-world business scenario. This assignment will require you to identify and classify costs, and discuss how these costs influence business decisions.

Instructions:

Introduction:

Begin with a brief introduction that outlines the importance of understanding direct and indirect costs in business operations and decision-making.

Identify a Real-World Business:

Choose a real-world business or organization. This can be one you are familiar with, one from your research, or even a hypothetical scenario that you construct based on realistic business models.

Provide a brief description of the business, including its industry, size, and primary products or services.

Classification of Costs:

Identify and describe at least 3 direct costs and 3 indirect costs associated with the chosen business.

Explain why each cost is classified as direct or indirect.

Impact on Decision Making:

Analyze how the identification and management of these costs influence business decisions.

Consider aspects such as pricing, budgeting, cost control, and profitability.

Provide specific examples or scenarios where direct and indirect costs play a critical role in decision-making

Conclusion:

Summarize the key points discussed in your assignment.

Reflect on the importance of accurately classifying and managing direct and indirect costs in achieving business success.

Research and Resources:

Conduct independent research to support your analysis. Use at least 2 credible sources, in addition to your textbook.

Cite all sources in APA format and include a reference list at the end of your assignment.