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.

1. 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.

1. 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:

1. 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.