Why is it important to classify costs into a cost hierarchy?

Why is it important to classify costs into a cost hierarchy?
It is important to classify costs into a cost hierarchy because costs in different cost pools
relate to different cost-allocation bases and not all cost-allocation bases are unit level. A
cost hierarchy refers to division of costs into different categories and categorizing them
into cost pools. Cost is allocated on the bases of allocation which are commonly
referred to as cost...