You work as the Finance Manager for a company.The company uses Microsoft Dynamics 365 Finance for its accounting system.
The company has a main office and eight branch offices.Three more branch offices are currently under construction.
You need to ensure that advertising expenses are balanced across the eight branch offices.
The advertising costs will be balanced across all eleven branch offices when the three new offices are complete.
Which option should you select in the ledger allocation configuration?
Click on the arrows to vote for the correct answer
A. B. C. D.D.
Topic 2, Manage and apply common processes.
In Microsoft Dynamics 365 Finance, the ledger allocation configuration is used to distribute or allocate accounting transactions across multiple accounts or cost centers. In this scenario, the Finance Manager needs to ensure that advertising expenses are balanced across all eight existing branch offices and three new branch offices when they are completed.
There are different allocation methods available in Dynamics 365 Finance, including Fixed percentage, Basis, Fixed weight, and Equally. Each method has its own characteristics and is used to achieve different allocation goals.
A. Fixed percentage: This method is used when the allocation percentage is fixed and remains constant over time. For example, if the advertising expenses are to be allocated based on the total revenue generated by each branch office, a fixed percentage can be assigned to each branch office based on its revenue contribution. The fixed percentage will remain constant even when new branch offices are added.
B. Basis: This method is used when the allocation is based on a specific attribute or characteristic of the transactions. For example, if the advertising expenses are to be allocated based on the number of employees in each branch office, the number of employees can be used as the basis for allocation. This method can be useful when there are significant differences in the size or characteristics of the branch offices.
C. Fixed weight: This method is used when the allocation is based on a fixed weight assigned to each branch office. For example, if the advertising expenses are to be allocated equally across all branch offices, a fixed weight of 1 can be assigned to each branch office. This method ensures that the allocation is fair and equal, regardless of the size or characteristics of the branch offices.
D. Equally: This method is used when the allocation is to be split equally across all branch offices, regardless of any other criteria. For example, if the advertising expenses are to be allocated equally across all branch offices, this method can be used. This method is similar to the Fixed weight method but does not require assigning weights to each branch office.
In this scenario, option D, Equally, would be the best choice. This method ensures that the advertising expenses are split equally across all existing and new branch offices, regardless of their size, revenue, or number of employees. This will ensure that the allocation is fair and equal and that each branch office shares the advertising costs equally.