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Why is it important that we establish pools of indirect costs - namely, those that cannot be directly associated with a unit or batch of
Why is it important that we establish pools of indirect costs - namely, those that cannot be directly associated with a unit or batch of product, like direct material and direct labor - and allocate them to products to achieve a total cost? How is this useful for estimating how much something could be made/sold for and for evaluating profitability of products / divisions? What are some options for doing this and criteria to be utilized in selecting the best methods?
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