COST CENTER

Meaning:
A cost centre is nothing but a separate department within a business to which costs can
be allocated. This also includes departments that do not produce directly but incur costs to the
business.
Two Types of Cost Centres:

Cost centres related to production - where the products are manufactured or processed.
Example of this is an assembly area.
Cost centres related to provision of services - where services are provided to other cost
centres. A simplest example for our understanding could be HR department, marketing function,
etc.

Create of Cost Center:

1) F11 Enable Cost Center – Yes

2) Gateway of Tally – Create –Ledger (All Expenses List)

3) Gateway of Tally - Accounts Info – Create & Accounting Voucher Entry
Salary, Telephone, Wages, Electricity & Etc – Indirect Expenses
4) Gateway of Tally – Accounting Voucher
5) Answer:
Gateway of Tally – Display –Statement of Accounts- Cost Centre- Categories Summery

Sum-1.
Cost Center : Marketing, Finance, Administration
1) Paid salary Rs. 28000(M-10000,F-10000, A-8000)
2) Paid Rent Rs. 8000(M- 2300, F-2200, A-3500)
3) Paid Stationeries Rs. 3000 for all departments
4) Paid electricity charges Rs. 12000 ( M-4000, F-3500, A-4500)
5) Paid sales Tax Rs. 1650 for all departments
6) Paid income tax Rs. 1800 for all departments
Sum-2
Cost Centre: - Accounts, Purchase, Sales, and Computer
Date Expenses Account Purchase Sales Computer Total
03-05-05 Electric bill 2000 2000 1400 5000 10400
05-05-05 Rent 1500 1500 300 3000 6300
07-05-05 Interest 500 200 150 - 850
05-05-05 Wages - 500 200 - 700
09-05-05 Stationery 250 50 120 100 520
13-05-05 Salary 4500 2000 3000 4000 13500
25-05-05 Postal charge 400 - - 150 550
27-04-05 Telephone bill 1300 300 200 1500 3300