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Features of Effective Cost Center Framework
During the establishing cost centers, an organization must consider the given points as:
a) Clear definition about the cost center boundaries. It should ensure such there's no overlapping of the boundaries defined in two (2) or more centers and no gaps whereas several aspect of the business that incurs cost is not have in a cost center.
b) A clear link along with the manager responsible so like to hold someone responsible for the costs incurred in a cost centre.
c) Costs must be analyzed into clearly defined categories in order to ensure such planned and genuine expenditure may be analyzed in the similar way.
d) The cost centers must enable the efficient and effective planning; control and directing of the organization's activities, thereby enabling it get its objectives.
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2012 2011 Cash 12200 17700 Acct receivable 25200 22300 Investments
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