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what is the cost object? what is the defference between
cost object and cost center?
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Answer Posted / sreekanta
Cost object is an item of expenditure like salary,rent etc.
Cost center is an area of activity. it could be activity of
income or activity of expenditure. When an activity center
is comprises of only expenditure it referred as cost center.
when the activity center has both income & expenditure
related to it, it is referred as Profit center. For e.g. a
regional sales office is a profit center. it can generate
income (sales), it also relates expenditure like salary,
rent, advertisement,stationery etc. HR dept in an
organization is a cost center since it is only a service
dept for internal requirement of the organization.
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