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Abstract

The project is about the elements of cost in overhead and labor rates and the significance

of the elements in the government contracts. Therefore the primary focus of the paper is to

highlight the incorporation of elements of cost in the administration of government contracts.

Also, the focus of the paper is to provide an in-depth explanation of the different cost in business

operation helping the government and other institutions to effectively manage their operation

cost while ensuring success. Understanding the essential elements of cost is important for any

business operation since it enables the business management to understand the different costs

forming the unit cost as well as their contribution to the operation. Government contracts, on the

other hand, are lucrative business opportunities which require extensive vetting before awarding

of the contract to the most suitable candidate since the operations of the contract have a direct

impact on the general public. The award of the contract is done through the respective

government departments with funding from the federal government. Therefore, it is important for

the government departments to understand the essential elements of cost in order to ensure the

quality of services offered under cost effective strategies which makes up the primary objective

of the research. Through the paper one can understand the elements of cost while ensuring

government contracts realize the intended goals through cost effective strategies minimizing

wastage of funds allocated to particular projects.

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Annotated Bibliography

ES. (2012). Lesson 48: Labour Cost and Overheads. ECourseOnline.

http://ecourseonline.iasri.res.in/mod/page/view.php?id=4686

The author provides adequate information on the difference between overheads and labor

cost as well as the primary objective of each. The article presents overhead as the sum of the

indirect labor, expense and material hence does not have any effect on the unit cost of an

operation. Classification of overhead is also provided including; variable, administrative, factory,

fixed, distribution, semi-fixed and selling overheads. For the labor cost, the author provides

essential characteristics that differentiate it from the labor cost. The information provided is

useful for beginners in accounting since it provides a clear distinction between the labor cost and

overheads. Similarly, the information can be useful for people in government since it ensures

proper management of funds allocated to different government projects ensuring proper award of

contracts.

Kumar, P. (2022). Top 3 Elements cost (With Diagram). Your Article Library.

https://www.yourarticlelibrary.com/cost-accounting/cost/top-3-elements-of-cost-

with-diagram/62130

The article provides an in-depth illustration of three elements of cost including; material,

expense and labor. Material cost is defined as the cost of commodities that facilitate the

operation of a business. The material cost can be divided into direct or indirect cost, with primary

and secondary impact on the operations respectively. The article also highlights the labor cost

and the expense all of which are also divided into direct and indirect depending on the impact on

the operations of the business. The information provided is useful for people in government for it
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facilitate appropriate award of contracts to the most qualified candidate. However, I would

recommend the article to any person eager to know the elements of cost and their attributes to the

unit cost and business operation.

Pethari, A. (2022). Elements of Cost in Cost Accounting. Navigation.

https://www.economicsdiscussion.net/cost/elements-of-cost-in-accounting/31700

The author provides adequate information on the essential elements of cost and their

significance in the operation of a business. The article identifies four elements, namely labor,

material, expense and overheads. The article further explains each of the identified elements with

their various classification as either direct or indirect. The overhead is presented as a

combination of the indirect costs in material, labor and expense. The author also provides a

comprehensive look into the various cost with elaborate classifications such as direct material

cost, direct wages, overheads, direct (chargeable) and indirect expense as well as indirect

material. Through the information one can understand the specific elements and their respective

areas of focus in the operations of a business while ensuring cost effective operation strategies.

The information is vital for people within various field of study and work other that accounting

helping them understand the various cost forming the unit cost and their respective attributes to

the business operation.

Schmitt, T. B. (2020). Cost of Labor. Investopedia.

https://www.investopedia.com/terms/c/cost-of-labor.asp

The article provides in-depth coverage on labor cost as well as the distinction between the

direct and indirect cost and their impact on the unit cost. The author provides extensive definition

of labor cost as well as its classifications. The article further provides examples of these costs in
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the current business space and their application. Schmitt also provides practical application of

labor cost in the business operation and the various indicators of success or failure. The

information provided is essential to people of all ages and fields with the urge to understand

labor cost and its implication in business operations. They also get to understand the practicality

of labor cost and its attributes to the unit cost and success of the operation. Governments

agencies can also benefit from this information since it help formulate contract awarding criteria

ensuring proper utilization of the funds allocated without any mismanagement.

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Reference

ES. (2012). Lesson 48: Labour Cost and Overheads. ECourseOnline.

Kumar, P. (2022). Top 3 Elements cost (With Diagram). Your Article Library.

Pethari, A. (2022). Elements of Cost in Cost Accounting. Navigation.

Schmitt, T. B. (2020). Cost of Labor. Investopedia.