cost centers and cost categories

Cost Centre is nothing but allocation of expenses department wise viz., Manufacturing,Sales/Marketing,Administrative,Finance as detailed below:

Expenses   -                                       !                                Related Cost Cntre

Production Exp                                   !

Wages & expenses related to           !                                 Manufacturing

Manufactruing   

So also for other related expenses relating to each catogery/department.

Advantage:  To prepare the Budget for the Next year (department wise) . To facilitate Cost Control. To analyse department wise expenses to review periodically & monitor the expenses before finalisation.

For example even for Branches also can be treated as cost centre viz., Branch A,B and so on & the whole expenses can be reviewed and each Branch's performance can also be ascertained & audited.