If a company wants to determine a product's cost,they must assign only direct costs.

Question

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If a company wants to determine a product's cost accurately, they must assign both direct and indirect costs. Direct costs are those that can be directly associated with the production of the product, such as material and labor costs. Indirect costs are those that cannot be directly traced to the production of the product, such as overhead expenses like rent, utilities, and administrative costs. Ignoring indirect costs can lead to inaccurate calculations and decisions about pricing and profitability.

If a Company Wants to Determine a Product's Cost,they Must