CO - Interview Questions

 

COST CENTER ACCOUNTING

How is the cost center accounting related  to Profit Center

In the master data of the Cost Center there is a provision to enter the profit center. This way all costs which flow  to the cost center are also captured in the profit center.

Cost centres are basically created to capture costs example Admin Cost Centre, IT Cost Centre etc.

Profit Centres are created to capture cost and revenue for a particular plant, business unit or product line

 

What is Cost Element Group ?

Cost Element Group is nothing but a group of cost elements which help one to track and control cost more effectively. You can make as many number of cost element groups by combining various logical cost elements.

 

What is Cost Centre Group

 

It is a group of cost centres which help in tracking and control the cost of a department more effectively. You can make as many number of cost centre groups by combining various logical cost centres. We can use various combinations of cost center group with the cost element group to track and control your costs per department or across departments.

 

What is the difference between Distribution and Assessment

 

Distribution uses the original cost element for allocating cost to the sender cost center. Thus on receiving cost centre we can see the original cost element from the sender cost centre. Distribution only allocates primary cost.

Assessment uses assessment cost element no. 43 defined to allocate cost. Thus various costs are summarized under a single assessment cost element. In receiver  cost centre the original cost break up from sender is not available. Assessment allocates both primary as well as secondary costs.

 

What are other activities  in Cost Centre

 

If there is a manufacturing set up entering activity prices per cost center / activity type is an important exercise undertaken in Cost center accounting

What is a Activity Type

Activity type could be machine hour, labour hour rate, utilities etc.