GFEBS L432E Cost Collection and
Allocation Questions and Answers |
Latest Version | 2024/2025 | 100%
Verified
What is a cost object in GFEBS?
✔✔ A cost object is an entity, such as a project, department, or task, to which costs are assigned
for tracking and analysis.
Why is it important to allocate costs accurately?
✔✔ Accurate cost allocation ensures that financial reports reflect the true cost of operations,
which is critical for budgeting, forecasting, and decision-making.
What are two common methods of cost allocation?
✔✔ Two common methods are direct allocation, where costs are directly assigned to a cost
object, and indirect allocation, where overhead or shared costs are distributed across multiple
cost objects.
How can overhead costs be allocated in GFEBS?
1
, ✔✔ Overhead costs can be allocated using pre-defined rates or cost drivers, which distribute the
costs proportionally across cost objects based on usage or activity levels.
What is the role of a cost center in cost allocation?
✔✔ A cost center is responsible for collecting costs related to specific activities or departments,
which can then be allocated to other cost objects for financial analysis.
How does cost allocation support financial decision-making?
✔✔ It supports decision-making by providing a detailed understanding of where resources are
being spent, allowing for more informed budgeting and financial planning.
What is the difference between fixed and variable costs in cost collection?
✔✔ Fixed costs remain constant regardless of activity levels, while variable costs fluctuate based
on production or activity levels.
How does GFEBS track costs for specific projects?
✔✔ GFEBS tracks costs through cost objects like internal orders or work breakdown structures
(WBS), ensuring all costs are captured and allocated to the correct project.
2
Allocation Questions and Answers |
Latest Version | 2024/2025 | 100%
Verified
What is a cost object in GFEBS?
✔✔ A cost object is an entity, such as a project, department, or task, to which costs are assigned
for tracking and analysis.
Why is it important to allocate costs accurately?
✔✔ Accurate cost allocation ensures that financial reports reflect the true cost of operations,
which is critical for budgeting, forecasting, and decision-making.
What are two common methods of cost allocation?
✔✔ Two common methods are direct allocation, where costs are directly assigned to a cost
object, and indirect allocation, where overhead or shared costs are distributed across multiple
cost objects.
How can overhead costs be allocated in GFEBS?
1
, ✔✔ Overhead costs can be allocated using pre-defined rates or cost drivers, which distribute the
costs proportionally across cost objects based on usage or activity levels.
What is the role of a cost center in cost allocation?
✔✔ A cost center is responsible for collecting costs related to specific activities or departments,
which can then be allocated to other cost objects for financial analysis.
How does cost allocation support financial decision-making?
✔✔ It supports decision-making by providing a detailed understanding of where resources are
being spent, allowing for more informed budgeting and financial planning.
What is the difference between fixed and variable costs in cost collection?
✔✔ Fixed costs remain constant regardless of activity levels, while variable costs fluctuate based
on production or activity levels.
How does GFEBS track costs for specific projects?
✔✔ GFEBS tracks costs through cost objects like internal orders or work breakdown structures
(WBS), ensuring all costs are captured and allocated to the correct project.
2
