Government price analysis of direct and indirect costs Essay

Government price analysis of direct and indirect costs - Essay Example This may be affected by a number of barriers such as their identification. Many accounting analysts and auditors claim that, in particular, indirect costs cannot be identified in a direct manner. This may affect the analysis of indirect costs within the scope of sales of service or product (Ballard, 2007). Another underlying problem with the analysis of direct and indirect costs by government for pricing and taxation is the cross-sectional relationship of salaries and overheads. The relationship cannot be estimated easily until or unless financial outlook is immersed with analytical elements. These include identification of pools of rate development, weaknesses that might be identified and capital costs associated with the cost rates (Ballard, 2007). Thus, it will not be incorrect to state that every element as noted above needs to be considered during the analysis of indirect and directs costs. Considering the barriers of identification of indirect costs, it makes it complicated to estimate the cross-sectional relationship between the salaries and