As stated above, the reason for analysing costs differently is to gain better information about our cost basis so that we can manage the business better. Direct and indirect costs help us to decide the full cost of a product or service when more than one is offered. If there were just a single product, life would be easy, because all of the costs could be allocated to that one product. Most businesses are much more complex than that, and are faced with the issue of how indirect costs should be apportioned to products. The most popular way to spread indirect costs is on the basis of direct labour. This is not the ‘correct way’, nor is it the only way.