What kind of costs are assessed and distributed

Question

Hi Gurus,
Can anyone explain to me what kind of costs are usually assessed and what kind of costs are usually distributed?
Thanks

Answer 1

hi there,
ok lets say you have a company and you have diff departments in there for say manufacturing, accounting, sales, marketing, HR and so on...and each are made cost centers since as you know each dept is a cost center where some or the other cost incurr on them
and you will have expenditure on ur company right!
lets say you have to pay electricity ,and rent for the building , and water bill, and postage and telegram expenses and things like that..
each department might be using diff units of electricity for say manufactuting department might use the 70 % of the total bill and other depts use only 30% of the whole bill but in the electricity expense GL you will put down the 100 % bill
since we have cost centers and this amt is goin to cost center attached on that gl so at later point they distibute the amt to other cost centers accordingly for internal auditing purpose ( to keep track of ) how much cost incurring in whihc department.
hope this gives you some idea on what you are looking for. assign points if helpful
rgds
Jay