The difficulty of fairly allocating direct expenses is one limitation of departmental income statements.

Name: The difficulty of fairly allocating direct expenses is one limitation of departmental income statements.
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Question

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Direct expenses are typically straightforward to allocate to specific departments because they are directly associated with those departments. The difficulty arises in allocating indirect expenses, which cannot be directly linked to a specific department.

The Difficulty of Fairly Allocating Direct Expenses Is One Limitation