cost center


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Cost center

Any division, department, or subsidiary of a company that has expenses but is not directly producing revenues.

Cost Center

A department or other section of a company where managers are directly responsible for costs. For example, consider a company that has a manufacturing department, a research and development department, and a payroll department. Each department could be a cost center, and the directors of each department would be responsible to keep costs to as low a level as possible. The company thus accounts for each cost center separately, which allows managers to take immediate responsibility for cost growth and credit for cost cutting.

cost center

A segment of a business or other organization in which costs can be segregated, with the head of that segment being held accountable for expenses. Cost centers are established in large organizations to identify responsibility and to control costs.
References in periodicals archive ?
The organizational chart includes total uses budget, general fund contribution (GFC), and fulltime equivalent (FTE) employees at the department level, and then cascades down through the cost center structure (division, subdivision, and program).
Managerial accounting influences the decisions of management regarding strategies from the beginning, cost type accounting and primary cost centers that determine a low price as possible, secondary cost centers influence the differentiation using IT and HR, to the end by profitability management that shows how successful a management strategy is.
Cost center accounting with reference to a high number of cost centers is a distinguishing characteristic of German cost accounting, so expectations about the future development of this method are of interest.
manufacturing firms use standard costing at about the same rate (64% and 73%, respectively), but German firms are more likely to report variances for each cost center (83% vs.
This model uses the TCU concept to help explain the distribution of costs as they relate to each cost center.
The system empowers cardholders to instantly and easily itemize, allocate and distribute card charges among cost centers by percentage or amount.
He wanted it to transform itself from a traditional cost center to a resource that could support business lines and add value to these lines.
Essentially are provided: Delivery of retrieved articles, portioning of delivery to individual cost centers, delivery to the respective cost center, creating halbjjEnhrlichen evaluations (eg sales statistics), provision and maintenance of electronic product data and provision and maintenance of a free city-owned Internet shops.
Separating fixed and proportional costs also allows cost center variance analysis, comparing target (flexible) costs to actual costs.