what is the impartence of secondary cost element in
controling, if it is needed give reasons
Answer Posted / waqas
It is used for co. cost allocation purpose. I just wanna
add one thing in the answer above, that is cost center
provides internal activity to other cost center, and that
internal activity is distributed by a secondary cost
element.
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Hi all see the problem is, suppose i sold goods to customer 10 units @ 120 & my COGS (cost of goods sold) is 100 per unit . After that he told me your quality is not good ok & u r charging high 4 that i will pay you only 110 rs for that otherwise i will return ur goods. After that i made 1 credit memo 4 that of rs 10 ok. now the issue is it is also affecting the COGS but it has to remain same And will effect at profit & my profit must be reduced from 20 rs per unit to 10rs per unit & COGS must remain constant i.e is 100 rs
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