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A cost centre is a department within a business to which costs can be allocated. The term includes departments which do not produce directly but they incur costs to the business, [1] when the manager and employees of the cost centre are not accountable for the profitability and investment decisions of the business but they are responsible for some of its costs.
Cost center may also refer to: Cost Sports Center , the indoor athletic facility often referred to by the same name Cost centre (business) , the part of an organization that does not produce direct profit and adds to the cost of running a company
A responsibility center is an organizational unit headed by a manager, who is responsible for its activities and results. [1] In responsibility accounting, revenues and cost information are collected and reported on by responsibility centers.
An effective cost allocation methodology enables an organization to identify what services are being provided and what they cost, to allocate costs to business units, and to manage cost recovery. Under this model, both the service provider and its respective consumers become aware of their service requirements and usage and how they directly ...
A shared service is an accountable entity within a multi-unit organization tasked with supplying the business unit, respective divisions and departments with specialized services (finance, HR transactions, IT services, facilities, logistics, sales transactions) on the basis of a service level agreement (SLA) with a costs charge out on basis of some type and system of transfer price.
Not all costs are ignored in a revenue center. For example, the manager of a revenue center is responsible for the expenses of his department (such as maintenance costs). [8] In a sales office (the most widespread example of a revenue center), maintenance costs can be construed as rent, salaries, taxes and security.
Sainsbury's distribution centre in Waltham Point, Hertfordshire, United Kingdom. A distribution center for a set of products is a warehouse or other specialized building, often with refrigeration or air conditioning, which is stocked with products to be redistributed to retailers, to wholesalers, or directly to consumers.
An investment center is a classification used for business units within an enterprise. The essential element of an investment center is that it is treated as a unit which is measured against its use of capital, as opposed to a cost or profit center, which are measured against raw costs or profits.