Direct manufacturing costs, raw materials, and labor are traced directly to the departments. For example, in particular, direct raw materials and supplies used in the production departments and direct labor costs are directly traced to these departments. In the same way, direct raw materials and supplies and direct labor costs used in the support section are also traced to these departments. Indirect costs (manufacturing overhead), a predetermined cost driver is allocated to the departments that use these resources. For example, in all operating and support sections of the factory, the cost of the responsible manager is an indirect cost and must be allocated to all departments. While the indirect labor for inspection of the output of the two operating departments would be allocated only to those two operating departments (Blocher, Stout, and Cokins, 2010: 234). The correct answer is C.