summarize Tracing costs is crucial in accounting because it allows businesses to accurately assign costs to specific cost objects, such as products, services, or departments. This process helps in determining the profitability of different segments of the business, aids in decision making, and supports effective budgeting and control.Explanation: Tracing costs involves identifying and assigning all the direct costs associated with producing a specific product or service. This includes costs like raw materials, direct labor, and other expenses directly linked to the production process.Profitability Analysis: By tracing costs, a company can determine the profitability of each product or service it offers. If a product's costs exceed its selling price, the company may decide to increase the price, improve efficiency, or discontinue the product.Decision Making: Tracing costs helps in making strategic decisions. For example, understanding the costs associated with different departments can guide resource allocation decisions.Budgeting and Control: Tracing costs aids in creating more accurate budgets and forecasts. It also helps in monitoring and controlling costs, as it allows for the identification of cost overruns or inefficiencies in specific areas.Pricing: Understanding the true cost of a product or service is essential for setting prices that cover costs and provide a reasonable profit margin.Performance Evaluation: Cost tracing can also be used to evaluate the pe