The cost center results are difficult to explain to non-business people using the various cost allocations. What is the best way to approach this?
Cost allocations are actually difficult to explain. However, this is not a problem of verbosity, but rather has to do with the allocations themselves.
Cost allocations conceal the points of cost incurrence. The heads of the debited cost centers usually have no or little influence upon the amounts they are billed. This causes much frustration. "I am billed costs that I am unable to influence,
which I believe are too high and I do not understand. How come my result is messed up due to external costs?".
There is a simple, quick and cost-saving solution to this: Abstain from coding. Where internal charging is required, enter the quantity structure (e.g. the hours worked by the workshop for the “production” cost center) and evaluate these with standard prices that you derive from market prices...
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