Difference Between COPA & PCA
Can you please let me know the main difference between COPA and PCA?
I know that PCA deals with the profit center costs and profits/revenue..but I am not clear about the basic
difference between PCA and COPA?
Ashok Kumar Singh Thuljaram replied
Dear Manish, In Profit Center Accounting Costs and Revenue are matched to find the profitability of the Investment Center. The shared services expenses are allocated equitably in between the profit centers to find our the accurate ROI of the Investment Centers. Here you will get the Segmental Profit and loss account. Whereas in the case of COPA, we get Product profitability upto Net income before Corporate tax. The Cost of Sales is matched with the revenue to get the gross margin per each product as well as marketing segment. Then selling overhead and Corporate expenses are allocated to the products on the basis of revenue and we get EBITDA(Earnings before Interest, Debenture interest and tax. The Longterm Interest and debenture interest shall also be allocated to the products equitably. Consequently, it is able to know the profitability of the products before payment of tax. If you have any query, let me know. Trust this answers to your query and helps much in resolving your problem! Regards, Ashok SINGH