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Cost allocation basis of internal audit fee between 2 entities

28 August 2008 833 views No Comment
Dear All, 

I require your help in the basis of cost allocation can be done for an internal audit fee between two entities.

BestRegards,

The  appropriate basis in the instant case may include:
1. Turnover of the respective entities,
2. Networth of the two entities
3. In the ratio of Other Audit fees like Statutory audit fees of the respective entities.
In the absence of complete details, we can just suggest the above.
Regards 

Dear Alll
 
Can anyone help me in my quary
 
In a Glass industry one machine is being used for the other to produce Product -A-.
 
Can we charge depreciation of the main machine in the cost of Product-A- what accounting entries we will be passing.
 
Regards
  

I may be missing your question, but here’s the je’s:
 
       Product B – Depreciation expense    $100
          Product A – Depreciation expense       $100
 
       Finished goods – Product B              $100
           Product B – absorption                        $100
 
I’m not a plant accountant, just taking a guess here.

 

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