Go Ad-Free on CAclubindia with Daily Mobile Updates. Subscribe Now!

cost centers and cost categories

inderjit (article) (145 Points)

19 March 2009

What is the meaning of cost centres and cost categories in tally give answer with example

thanks in advance

Reply
Follow
Share

1 Replies

V P Narasimhan (Accounts Manager) (791 Points)
Replied 19 April 2009

Cost Centre is nothing but allocation of expenses department wise viz., Manufacturing,Sales/Marketing,Administrative,Finance as detailed below:

Expenses - ! Related Cost Cntre

Production Exp !

Wages & expenses related to ! Manufacturing

Manufactruing

So also for other related expenses relating to each catogery/department.

Advantage: To prepare the Budget for the Next year (department wise) . To facilitate Cost Control. To analyse department wise expenses to review periodically & monitor the expenses before finalisation.

For example even for Branches also can be treated as cost centre viz., Branch A,B and so on & the whole expenses can be reviewed and each Branch's performance can also be ascertained & audited.