Cost center accounting: task and process

Every entrepreneur wants to know whether his company is working economically. The statement that an entire company has made a profit does not, however, say anything about which areas of the company have worked economically and which have not.
The cost center accounting has the task of distributing the costs incurred to individual cost centers.

A cost center is a separate area in a company. It is formed according to aspects such as functions or areas of responsibility (e.g. sales, purchasing, production, customer service).

The cost center accounting usually proceeds in the following steps:

1) Aus der Cost type accounting ergibt sich die Aufstellung aller Kosten, die in einem Betrieb in einer Periode entstanden sind.

2) The individual costs can be assigned directly to the cost bearers (products or services).
3) Soweit die Overhead direkt verursacht worden sind, können sie den Kostenstellen auch direkt zugeordnet werden (z. B. die Gehälter einer Kostenstelle oder die dort angefallenen Abschreibungen).

4) The remaining overhead costs are allocated to the cost centers using keys (e.g. rent by square meter).

5) If there are cost centers that have provided services for other cost centers, these must be "allocated" to the other cost centers after they have been caused.

6) The result of the cost allocation is the cost by cost center. In a final step, surcharge rates are determined that are used further in cost unit accounting.

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