Assignment 4 Analysis of Direct Costs
Running head: ANALYSIS OF DIRECT COSTS Friday, August 22, 2014
Analysis of Direct Costs
Kristin Velix
Professor Bartillomo
Strayer University
Introduction
Developing and building a drone is one thing while developing a navigation system is completely another aspect. A drone can be considered a toy without a well-engineered design and functional navigation system. The navigation system is mainly used to give commands to the drone to undertake actions that are compatible with the development of the drone. With all the funds that are put into the development of the drones, the navigation system is developed in manner that cannot be prone to outside interference like hackers, terrorist or anyone that would take over the drones navigation system. It must contain a system that will be able to take commands from a single base irrespective of the geographical condition that the drone is in (Bhimani, Horngren, Datar, Rajan, et al, 2012).
A prediction of the main cost that is associated with the VectorCal’s drone navigation system production.
There are two main costs associated with the production of VectorCal’s drone navigation system, they are direct labor and material costs. There are also two types of labor costs associated with the production of the navigation system, indirect and direct labor. Direct labor is labor consumed in areas that have a direct connection with the production or provision of service, and it is produced by skilled workers and business operators. An example would be workers who are in the production line of the navigation system. These employees are welders, cutters, engineers, equipment operators, technicians of equipment, mechanical, production supervisors and any employee directly related to the production of the navigation systems.
Indirect labor is labor consumed in the administrative areas of business that support production and trade. Employees who are on the administrative side of the business are
Analysis of Direct Costs
Kristin Velix
Professor Bartillomo
Strayer University
Introduction
Developing and building a drone is one thing while developing a navigation system is completely another aspect. A drone can be considered a toy without a well-engineered design and functional navigation system. The navigation system is mainly used to give commands to the drone to undertake actions that are compatible with the development of the drone. With all the funds that are put into the development of the drones, the navigation system is developed in manner that cannot be prone to outside interference like hackers, terrorist or anyone that would take over the drones navigation system. It must contain a system that will be able to take commands from a single base irrespective of the geographical condition that the drone is in (Bhimani, Horngren, Datar, Rajan, et al, 2012).
A prediction of the main cost that is associated with the VectorCal’s drone navigation system production.
There are two main costs associated with the production of VectorCal’s drone navigation system, they are direct labor and material costs. There are also two types of labor costs associated with the production of the navigation system, indirect and direct labor. Direct labor is labor consumed in areas that have a direct connection with the production or provision of service, and it is produced by skilled workers and business operators. An example would be workers who are in the production line of the navigation system. These employees are welders, cutters, engineers, equipment operators, technicians of equipment, mechanical, production supervisors and any employee directly related to the production of the navigation systems.
Indirect labor is labor consumed in the administrative areas of business that support production and trade. Employees who are on the administrative side of the business are
References: Bhimani, A., Horngren, C., Datar, S., Rajan, M. et al. (2012) Management and Cost Accounting. 5th ed. Edinburgh: Prentice Hall, p.369 - 378. Chadwick, L. (2002) Essential Finance and Accounting for Managers. Harlow, London, New York, Massachusetts, San Francisco, Toronto, Son Mills, Sydney et.al: PearsonEducation, p.280-281 Direct Labor, Direct Materials, and Overhead, (nd). http://academic.regis.edu/dbush/Accounting/Accounting%20Help/DL%20DM%20OH/acc_dl_dm_o.htm Candace Webb, Demand Media, (nd), Labor Cost Vs. Material Cost. http://smallbusiness.chron.com/labor-cost-vs-material-cost-11368.html Definition of 'Acquisition Cost ', (nd), http://www.investopedia.com/terms/a/acquisition-cost.asp Direct vs Indirect Costs, (nd), http://www.uaa.alaska.edu/research/OSP/direct-vs-indirect-costs.cfm