We have gone into a lot of detail on how indirect activity allocation cycles work with category 2 (indirect determination, indirect allocation) are used. The main takeaway from category 2 type activities is that the quantity of activity posted is calculated based on information derived from the receiver cost objects. You either don’t know or find it difficult to determine how much activity should be posted. What if you do know how much activity should be posted, but don’t want to manually determine how to allocate the posting to other cost objects? That is where category 3 (manual entry, indirect allocation) activity types come in.