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

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In order to determine a product's cost, a company must assign both direct and indirect costs. Direct costs are expenses that can be directly attributed to the production of a specific product or service, such as materials and labor. Indirect costs include expenses that are not directly traceable to a specific product or service, such as rent and utilities for the factory. Both direct and indirect costs must be taken into account to determine a product's total cost.

If a Company Wants to Determine a Product's Cost, They