Some Operating And Accounting Costs A Business Incurs


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Direct & indirect costs

Direct costs are those costs that can be directly attributed to a product or product line, or to one source of sales revenue, or one business unit or operation of the business. An example of a direct cost would be the cost of tires on a new automobile.

Indirect Costs are very different and can’t be attached to any specific product, unit or activity. The cost of labor or benefits for an auto manufacturer is certainly a cost, but it can’t be attached to any one vehicle. Each business has to devise a method of allocating indirect costs to different products, sources of sales revenue, business units, etc.

Most allocation methods are less than perfect, and generally end up being arbitrary to one degree or another. Business managers and accounts should always keep an eye on the allocation methods used for indirect costs and take the cost figures produced by these methods with a grain of salt.

Fixed & variable costs

Fixed Costs are those costs that stay the same over a relatively broad range of sales volume or production output. They’re like an albatross around the neck of business and a company must sell its product at a high enough profit to at least break even.

Variable Costs can increase and decrease in proportion to changes in sales or production level. Variable costs vary proportionately with changes in production

Relevant & irrelevant costs

Relevant Costs are essentially future costs that could be incurred, depending on what strategic course a business takes. If an auto manufacturer decides to increase production, but the cost of tires goes up, than that cost needs to be taken into consideration.

Irrelevant Costs are those that should be disregarded when deciding on a future course of action. They’re costs that could cause you to make a wrong decision. Whereas relevant costs are future costs, irrelevant costs are those costs that were incurred in the past. The money’s gone.

Is There An Ideal Time To Publish Your Articles?

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Today’s post is special for a couple of reasons. First it has brought back some memories about my own early days on the Web; and Second it is a rather inspiring account of the author’s own recollection of his early Web publishing efforts. When you think about it, the vastness of this Internet community/marketplace could be very intimidating.

My memories – as conjured up by the article I’m about to share with you – are vivid and, as a Web marketer going on 5 years with a pretty decent demand for my articles, I share the following article with the knowledge that, in order for any entrepreneur or marketer to be successful on the Web, s/he MUST be able to communicate effectively with the community; and the best way to be effective is to be honest to yourself and your audience.

Here’s the entire article – which was shared with me – authorized for republishing by, and with a few words of introduction from, my reliable copywriting buddy at the Copywriter’s Roundtable:

Today, I’ll share what might be the weirdest (and best) invitation you’ll hear all year. But first, a challenge. This comes to us via our Kiwi pal and fellow copywriter, Sean D’Souza. What’s the challenge? By way of explanation, I happen to know that a lot of you guys are not just aspiring copywriters… but aspiring writers in general. Sean, too, was once in your shoes.

And then he did something about it. Today, he’s going to challenge you to do something about it too. Even if the kind of his writing he’s recommending ISN’T something on your wordsmithing bucket list, I encourage you to read on — simply substitute the kind of writing you want to do with the kind Sean talks about here.

Sean, take it away…

WHEN’S THE RIGHT TIME TO PUBLISH YOUR ARTICLE?
by Sean D’Souza

Imagine a daughter who’s about to utter her first word. For a long time her expectant parents have been waiting to guess what that first word would be. Would it be ‘dada’ or ‘mama’? Or something else altogether? And then she says it! There are whoops of joy. Except this daughter is not really a baby. She’s a woman at the ‘ripe, old age’ of 35. And there’s nothing wrong with the woman at all.

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She was just waiting for the right moment to say her first word. Yes, I know it’s a ridiculous story But it’s not any more ridiculous than you waiting for the right moment to publish your article. As we go through writing articles, we believe that our articles aren’t quite good enough to post on our websites or blogs. So we salt them, in the hope that we’ll write better articles in the future.

If I’d waited for the future, you wouldn’t be reading this article. When I started writing articles way back in the year 2000, I struggled with my articles. I didn’t feel they were good enough. And besides I had one massive problem. I felt like a fraud, because I was a cartoonist and knew nothing about marketing. But I’d read an article in the Reader’s Digest when I was a child. The title of the article was “Be brave and mighty forces will be with you.”

So I gave in to mighty forces. I published my articles. And to my surprise, others not only wanted to read them, but wanted to publish them as well. And while it took us over a year back then, over a thousand people subscribed. One thousand people were reading my ‘crappy’ articles. And it didn’t stop there. I then wrote this document called The Brain Audit. It was only 20 pages long, including some fillers. And at first it was a trickle of customers that bought it, but soon we had hundreds of people buying it.

I’m sure you’ve heard this story before, but we had sold over $50,000 worth of The Brain Audit in that form; And it was only then that it got upgraded. (Today The Brain Audit is 180 pages and far more polished); but what if I had waited for the perfect moment? What if my articles still needed polish? What if I had believed that The Brain Audit was too anorexic to publish?

Be brave! Go ahead and publish your stuff. And then be surprised, just like I was.
The article ends, hope you liked it.

Note to the reader: John at Copywriter’s Roundtable has invited you to sign up for $78 worth of free gifts at the Copywriter’s Rountable. John is a very reliable, down to earth and principled individual, so you WILL get your gifts when you sign up.

As a token of our appreciation the free ebook titled, Storytelling Marketing can be yours if you have any interest in the art of storytelling. All you have to do is download it here, enjoy the reading and learn how storytelling can be a powerful ally in any business or marketing pursuit!

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