Creating Rate-Based Allocations (Oracle General Ledger Users' Guide)


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Creating Rate-Based Allocations

Rate-based allocations use current, historical or estimated rates to allocate costs such as employee benefits, commissions, bad debt, warranty costs and overhead. For example, you might want to allocate warranty costs to each division based on sales revenues and a warranty loss rate.

To create a rate-based allocation, define a recurring journal or MassAllocation formula using the statistical balance of the appropriate accounts to compute the rate.

Alternately, you can enter a formula that uses a fixed rate to represent your best estimate of future costs. Each accounting period, adjust your estimated rate by revising the formula definition.

Creating Rate-Based Allocations

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