COST CATEGORY & CENTER

COST CATEGORY

Cost categories are the group for cost center object.

For Example ...
Salesman
Employee
Conveyance, etc.

COST CENTER

Cost center is a single entity that related with a particular "Cost category"

For Example ...
Salesman A, Salesman B, and Salesman C are related to 'Salesman' Category.

Steps To Enable Cost Center & Category

1. Open an already existing company.

2. Go to “Gateway of Tally”

3. Press “F11” key

4. Select “Accounting Features”

5. Set the following options to 'Yes'
* Main Cost Category
* Maintain more than one payroll or cost category

Steps To Create Cost Center & Category

After enabling the "Cost Category and Centers" follow the below steps to create Cost categories and Cost centers.

1. Go to “Accounts info.”

2. Create Cost Categories.

3. Create Cost Centers under selected Cost categories.

LEDGERS FOR COST CENTRES

The cost centers ledgers are helping to enter cost centers transactions in the accounting vouchers.

After creating Cost category and Cost centers, follow the steps to create cost centers ledgers.

1. Click on "Account Info."

2. Click on "Ledgers"

3. Click on "Create"

4. Enter ledger name and group.

5. Make yes to "Cost centers are applicable"

VOUCHER ENTRY

1. Click on "Accounting Voucher"

2. Choose the type of voucher (Payment or Receipt)

3. Enter Expense ledger in payment voucher an Income ledger in receipt voucher.

4. Enter the cost centers with cost category.

5. Enter Cash/Bank in credit side (Payment voucher) or debit side (Receipt voucher).

6. Now save the voucher.

PRACTICE QUESTION

Company name: Amit & Sons

Ledger Entries

Cash a/c Rs. 17,00,000

Cash at bank Rs. 25,000

Bad debts. Rs. 65,000

Cost category: Salesman

Ledger: Conveyance A/c (Amount Rs. 33,500)
Voucher: Payment

Cost Centers	Amount Rs.
Salesman A	5,500
Salesman B	6,000
Salesman C	7,500
Salesman D	8,000
Salesman E	6,500

Cost Category: Bad Debts
Ledger: Bad Debts Recover A/c (Amount Rs. 1,05,000)
Voucher: Receipt

Cost Center	Amount Rs.
A	40,000
B	65,000

Cost Category: Employee     
Ledger: Salary A/c (Amount Rs. 1,12,000)
Voucher: Payment

Cost Center	Amount Rs.
Umesh	25,000
Rajeev	27,000
Priyanka	32,000
Preeti	28,000

Cost Category: Watchman 
Ledger: Bonus A/c (Amount Rs. 26,000)
Voucher: Payment

Cost Center	Amount Rs.
Sunil	5,000
Ramesh	7,000
Raghu	6,000
Akash	8,000

Cost Category: Agent
Ledger: Commission Rec.  A/c (Amount Rs. 34,500) 

Voucher: Receipt

Cost Center	Amount Rs.
Amit	12,000
Vijay	10,000
Krishna	12,500

COST CATEGORY AND COST CENTRE

COST CATEGORY AND COST CENTRE

This option is used to know the analysis of our business performance.

Cost category:- It is collection of cost centre.

Note:- One cost category which name is primary has been already created.

Examples:- G.K.P. branch, LKN branch, Kanpur branch, Soap, Hair oil, Perfume, Surendra, Mayoor, Rina, Tally, MCA, Raj, Vinay, Raheem etc.

To activate cost category and cost centre: -G.O.T. (gateway of tally) --> F11 (company features)-->F1(accounting features).

To create cost category:- G.O.T. (gateway of tally) --> accounts info --> cost category--> create(single).

After that following form open-

Example:-

How we use it-

First we create a company. In it we create ledgers, cost category, cost centres and use it in doing voucher entry.

We make cost categories for example-

To create cost centre path:- G.O.T.(Gateway of tally)--> Accounts info--> cost centre--> create(single).

After that following form open-

Note- in this form we select cost category from pre- define category or pre created category.

We create cost centres for example-

Path for ledger creation:- G.O.T.(Gateway of tally)--> Accounts info--> ledger-->create(multiple).

Path for voucher creation:- G.O.T.(Gateway of tally)--> Accounting voucher-->F8(sales voucher).

To view cost category and cost centre report:- G.O.T. (Gateway of tally)-->display--> statement of account--> cost centre--> category summary.