What Are the Three Main Guidelines That Managers Use When

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The Answer is The three main guidelines for refining a costing system include direct-cost tracing,indirect-cost pools,and cost-allocation bases.Managers us direct-cost tracing when they need to identify the direct costs.The result of direct-cost tracing leads to reduce the amount of indirect costs and minimize the extent to which costs have to be allocated,rather than traced.Managers expand the indirect-cost pool until each pool is more homogenous.All costs in a homogeneous cost pool have the same or similar cause-and-effect relationship with a single cost driver that is used as the cost-allocation base.Managers use the cost-allocation bases because they use the cost driver as the cost-allocation base for each homogenous indirect-cost pool.

What Are the Three Main Guidelines That Managers Use When

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