424 Week 2 Three Page paper

Overhead costs sometimes referred to as operating expenses; these are the expenses that a business encounters to remain active in the competitive market and has no connection to production or creation of services. These costs are not directly related to the manufacturing, selling of products or provision of services. They are incorporated in the income statement of the business or company; like a business has to pay rent depending on the natureit’s based on, this has nothing to do with the business, regardless of success on occasional basis. Overhead costs include: purchase of company’s or offices’ equipment, utilities, rent and office supplies (Plank, 2018, p.78). Comment by nikkole stites: This is not true. Overhead costs are indirect costs which supports a production function. Comment by nikkole stites: Changing the work “indirectly” to not directly changes the meaning of the definition. These terms have two different meanings. The one you utilized does not correctly define overhead costs. Comment by nikkole stites: Not sure the purpose of this statement. Overhead costs effect the nature of the company’s business. In order to be profitable, companies need know their indirect costs to know their break even line in order to know profit loss or gain.

Overhead costs have been categorised into three thus: Fixed; it includes monthly rent of the business premise; the next category is Semi-variable: refers to those expenses that are involved depending with the nature of services and customers served, like having more customers at a given period of time and the company or business spends more cash on printing materials. Lastly isare the Variable variable costs; this involves wages, monthly based expense, such as salaries of specified workers. Overhead costs directly have negative impacts on the business when not controlled; and they do not involve the revenues (Plank, 2018, p.78). Comment by nikkole stites: What do you mean? This sentence does not have a logical thought process. The yellow highlights are grammar, mechanical, and syntax errors.

In starting business or small businesses can be made to fail by this these overhead costs, like underground business or unknown business may pay a rent for room as an office, as it still has no staffs and has not reach a level to serve customers to maintain or balance the cost from the profit it accrued. The new entrepreneur can use home staffs until that time it business has expanded to afford a better room or office for the staffs and customers. Businesses or companies employ cost accounting to realize those expenses relating to services and production; like a company or an office will track amount spent on cartridges either monthly when producing copies of forms; or shoe manufacturer may investigate cash spent on materials and labour services regarding time; cost accounting is not overseeing the general performance of the company or business; and its free from government regulations. In the treatment of the overhead costs as per cost accounting; the accountants are to link the cost object and the overhead costs, getting an average of aggregate number, thus spreading the overhead costs to all products (Globerson, 2017, p.35).

Companies have fluctuating benefits, different set of goals they are anchored on and function as a whole. The different types of companies consist of public companies, personal liability companies, non-profit companies, government companies and private limited companies. Public company is that company authorized and registered according to a country’s law, to sell its securities to the public as whole. In public companies, there are shareholders, the possession or ownership is distributed among individuals thus encompassing the management and board. The security of the company is openly traded among the general public, public companies are subjected to regulations, keen observations from the public. Like the company has to expose the general report on profit, performance and even critical information as proprietorship issues that the competitors can take advantage of; to the general public (Globerson, 2017, p.35). Comment by nikkole stites: I think I understand the concept and taught process for this paragraph. The logical flow, grammar, and mechanical errors make it difficult to read.

Non-profit organizations or companies are not advocating for profits but shared social views or point of observation. These companies use their economic resources to benefit their social objectives rather than focusing on the shareholder request for profit making or gain. These organizations are tax exempt, in that the monies they receive are of charity work; perceived on religious views, education and science in research. They are focusing on values of honesty, truthfulness, transparency and time focus. These organizations are to abide on transparency principles to the donors, public community and volunteers; they are to instil ethical standards and behaviours on the public. Non-profit organizations or companies are charitable they address social problems and fund projects that motivate and ethically develop societies (Globerson, 2017, p.35). Comment by nikkole stites: How does personal liabilities and describing liabilities of various company types effect overhead costs? You did not tie the rest of these paragraphs into the topic of overhead costs. Instead, you could have written a conclusion for your paper.

Personal Liability Company in nature is private in that it is frequently maintained by associates or groups of individuals of a category like a group of accountants, business people, lawyers or even engineers. The company is incorporated in that it’s maintained and based on the tenets of personal liabilities. The personal liability portrays that those earlier leaders, stakeholders, managers and any member associate is accountable for the losses or debt of the company. The directors of these kinds of companies are regarded outside or separate from the company. These companies have no rules on how profit is shared and security is obtained by the directors (Globerson, 2017, p.35).

Private limited company is a small business owned privately where shareholders are restricted from public trading of share while directors are limited to their shares as per the liabilities. These companies are of associates thus referred to as incorporate, where even in the absences of the owner or director the entity can still operate independently; thus being continue in existence as compared to other types of company. Private limited companies are subjected to lower corporate tax as compared to other types of companies; being private has various advantages enjoyed; when financial problems are experienced most companies may shut down making the shareholders to lose their shares; while private companies regardless of financial situation or shut down then no shareholder is to lose his/her shares (Globerson, 2017, p.35).

Any company where the government holds the most shares, fifty-one percent and above, is referred to as Government Company. These companies are mostly formed by the executive moves. Government companies are formed under companies’ act depending with the involved states, the company is accountable to the government as filed reports are brought before the legislature of the state (Ostos, Hinderer & Bravo, 2017, p.63).

References Comment by nikkole stites: References not in APA format. You need to ensure you have the URL for the article even if it was retrieved from the APUS library.

Globerson, S. (2017). The Journal of modern project management. Journalmodernpm.com. p.35

Ostos, J., Hinderer, H., Bravo, , E.(2017). Universidad and Empresa. Redalyc.org. p. 63

Plank, P. (2018). Price and Product-Mix Decision Under Different Cost.Springer.p. 78

Roness, P.G. (2017). Transcending new public management. Taylorfrancis.com. p.47