The difference between cost center and profit center
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A cost center is a reporting unit of a business that is responsible for costs incurred, while a profit center is a reporting unit that is ... AccountingTools CPECourses CPECourses CPELogIn HowtoTakeaCourse StateCPERequirements Books CollegeTextbooks AccountingBooks FinanceBooks OperationsBooks CPAExamStudyGuides Articles Articles TopicsIndex SiteArchive Podcast AccountingBestPractices PodcastIndex PodcastSummary Dictionary FAQs About About Contact EnvironmentalCommitment Home AccountingTools CPECourses/CPECoursesCPELogInHowtoTakeaCourseStateCPERequirements Books/CollegeTextbooksAccountingBooksFinanceBooksOperationsBooksCPAExamStudyGuides Articles/ArticlesTopicsIndexSiteArchive Podcast/AccountingBestPracticesPodcastIndexPodcastSummary Dictionary/ FAQs/ About/AboutContactEnvironmentalCommitment Home/ AccountingTools AccountingCPECourses&Books Articles AccountingTools CPECourses/CPECoursesCPELogInHowtoTakeaCourseStateCPERequirements Books/CollegeTextbooksAccountingBooksFinanceBooksOperationsBooksCPAExamStudyGuides Articles/ArticlesTopicsIndexSiteArchive Podcast/AccountingBestPracticesPodcastIndexPodcastSummary Dictionary/ FAQs/ About/AboutContactEnvironmentalCommitment Home/ RelatedCoursesCostManagementRevenueManagement WhatisaCostCenter?Acostcenterisareportingunitofabusinessthatisresponsibleforcostsincurred.Anexampleofacostcenteristhemaintenancedepartmentofabusiness,whereitsmanagerisonlyratedontheamountofcostsincurredtomaintainfacilitiesandequipmentatapredeterminedlevel.Similarly,theaccounting,finance,informationtechnology,andhumanresourcesdepartmentsarealltreatedascostcenters.WhatisaProfitCenter?Aprofitcenterisareportingunitofabusinessthatisresponsibleforprofitsgenerated.Anexampleofaprofitcenterisasubsidiary,whichisresponsiblefortheamountofsalesgenerated,aswellasallcostsincurred.Similarly,acountrydivisionisalsotreatedasaprofitcenter,asmayaproductline.ComparingCostCentersandProfitCentersThemaindifferencebetweenthetwoisthatacostcenterisonlyresponsibleforitscosts,whileaprofitcenterisresponsibleforbothitsrevenuesandcosts.Anotherdifferenceisthatcostcenterstendtobeorganizationallysimple,whileprofitcentersaremorelikelytohaveacomplexstructure.Bothconceptsareusedinabusinesswhereseniormanagementwantstodriveresponsibilitydownintotheorganization. Thedifferencebetweenthedirect... Thedifferencebetweenvertical... CPECourses/CPECoursesCPELogInHowtoTakeaCourseStateCPERequirements Books/CollegeTextbooksAccountingBooksFinanceBooksOperationsBooksCPAExamStudyGuides Articles/ArticlesTopicsIndexSiteArchive Podcast/AccountingBestPracticesPodcastIndexPodcastSummary Dictionary/ FAQs/ About/AboutContactEnvironmentalCommitment Home/ AccountingTools CollegeTextbooksAccountingBooksFinanceBooksOperationsBooksCPAExamStudyGuides Sendusyoure-mailaddresstoreceivemonthlycoursediscounts * Thankyou! Copyright2022
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Cost centers and profit centers are usually associated with planning and control in a decentraliz...