What are: (a) A cost centre; (Section 17.9 .1) (b) A profit centre; (Section 17.9 .2) and
Question:
What are:
(a) A cost centre; (Section 17.9 .1)
(b) A profit centre; (Section 17.9 .2) and
(c) An investment centre? (Section 17.9 .3)
Data from section 179.1
Data from section 17.9.2
Data from section 17.9.3
Transcribed Image Text:
A cost centre is a unit of the organisation in respect of which a manager is responsible for costs under their control. A cost centre could be a location (e.g. a department) or a function (e.g. the manufacture of a product), or it could even be a production machine or group of similar machines. One essential feature of a cost centre is that it must be a homogeneous unit carrying out a single form of activity. A second essential feature is that it must correspond to an identifiable managerial responsibility. Identification of a cost centre with managerial responsibility leads to a further type of cost classification, namely controllable and non-controllable costs. Costs allocated
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Related Book For
Financial And Management Accounting An Introduction
ISBN: 9789332511200
5th Edition
Authors: Pauline Weetman
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