Definition

Cost center

A cost center refers to a responsibility center that incurs costs (and expenses) but does not directly generate revenues. Managers of cost centers have the authority to incur costs. They are evaluated on their ability to control costs. Cost centers are usually either production departments or service departments.

Share it:  Cite

More from this Section

  • Compensating balances
    Compensating balances refer to the minimum cash balances required by a bank in support ...
  • Quality of earnings
    Quality of earnings provides full and transparent information that will not confuse or ...
  • Direct labor
    The work of factory employees that can be physically and directly associated with converting ...
  • Standard predetermined overhead rate
    Standard predetermined overhead rate is an overhead rate determined by dividing budgeted ...
  • Current liability
    A current liability is a debt that a company can reasonably expect to pay (1) from existing ...