Often, there are more cost centers set up in cost accounting than in any dimension that is set up in the general ledger. You can transfer the general ledger income statement accounts or create your own chart of cost types.Ĭost centers are departments and profit centers that are responsible for costs and income. You define a chart of cost types with a structure and functionality that resembles the general ledger chart of accounts. You define cost types, cost centers, and cost objects to analyze what the costs are, where the costs come from, and who should bear the costs. The following diagram shows the workflow in cost accounting.Ĭost Types, Cost Centers, and Cost Objects Cost types, cost centers, and cost objects.Workflow in Cost AccountingĬost accounting has the following main components: In cost accounting, you allocate actual and budgeted costs of operations, departments, products, and projects to analyze the profitability of your company. What types of costs that you incur when you run a business?.Cost accounting information is designed to analyze: Cost accounting can help you understand the costs of running a business.
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