Question

1. Pick a company of your choice
2. Identify the industry in which this company operates
3. Identify a cost object for this company
4. Provide examples of the following types of costs for this company and the chosen cost obejct:
   • Fixed costs
   • Variable costs
   • Direct costs
   • Indirect costs
   • Inventoriable costs
   • Period costs
5. Respond to the thread posted by one of your classmates and provide examples for these cost categories for the company chosen by your classmate.

Answer 1

IDENTIFICATION OF COMPANY AND IT'S COST OBJECT

COMPANY NAME : FACEBOOK Inc.

INDUSTRY : Social networking company. It allows people to connect / communicate with their friends , family, collegues etc. Facebook also provides services like: newsfeed, timeline, messenger etc.

COST OBJECT : The most important cost object of facebook are company's product and services. Therefore , the cost object of facebook is it's social media service to it's users. examples are : machines and users of facebook account.

EXAMPLES OF THE TYPES COST

• fixed cost : 1. The cost of employees is fixed in facebook

2. Property expenses like; maintenance of property,whether the customers loged in or not in to facebook,such costs have to be met by the company

3 .Insurance costs like; insurance coverage to employess, property etc.

• variable cost : 1. Overall marketing budget 2. Customer service cost 3.Tool costs for facebook for the service to it' customers. 4 . Content creation costs of facebook

• direct cost : 1. services to customers. service cost will be the direct cost of facebook Inc. 2 .Direct employees cost 3. cost of technology directly used for service

• indirect costs : 1.computer software 2. hardware 3.marketing and business development activities of facebook. 4. promotional expenses.
• inventoriable cost : 1. rent 2. Insurance 3. utilities expenses. 4. administrative expenses.   
• period costs : 1.salaries & bonus 2. Selling,general and administrative expenses .