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You are a consultant and need to explain to a newly opened manufacturing company the importance of allocating costs to a product

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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.