Direct versus Indirect Costs: If a cost can be traced directly to its cost object, why might a company choose not to trace, but rather, to include the cost in the indirect cost category and allocate on some arbitrary basis? Explain the advantages and disadvantages of tracing versus not tracing.
If a cost can be traced directly to its cost object, why might a company choose not to trace, but rather, to include the cost in the indirect cost category and allocate on some arbitrary basis? Explain the advantages and disadvantages of tracing versus not tracing.