Reference no: EM132753602

Question: You are a consultant and need to explain to a newly opened manufacturing company the importance of allocating costs to a product. You will need to discuss direct cost, indirect cost, opportunity cost, and sunk cost to the plant manager.

Which type of cost do you think is the most important to a company: direct or indirect cost?

Of your chosen cost (direct or indirect), answer the following:

Define the cost.

Give a real-life example.

Explain why you chose that cost, including advantages and disadvantages in your answer for both.

Explain opportunity and sunk costs by doing the following:

Differentiate between opportunity and sunk costs.

Define both opportunity and sunk cost.

Give a real-life example of each.

Explain why both are important to a company.