What Is a Cost Center?

Cost center is one of the responsibility centers in responsibility accounting. A responsibility center responsible only for the cost of a product or service. Cost centers have cost decision-making power over the activities they perform. Because it is not responsible for the sales of products or services, its performance has nothing to do with sales revenue or profits. The goal of the cost center is to achieve a given output with the lowest cost; or to increase the output under the premise of the budget. ^[1]

Cost Center

Cost center is one of the responsibility centers in responsibility accounting. A responsibility center responsible only for the cost of a product or service. Cost centers have cost decision-making power over the activities they perform. Because it is not responsible for the sales of products or services, its performance has nothing to do with sales revenue or profits. The goal of the cost center is to achieve a given output with the lowest cost; or to increase the output under the premise of the budget. ^[1]

The cost center is the center that assumes control and assessment responsibility for costs and expenses, and collects and allocates expenses and controls costs.

In the organizational structure, each department (the third-level structure of the organization) is linked to one or several cost centers. In the transaction, you can put different

A cost center is a unit whose owners are responsible only for its costs. A responsibility center that is only responsible for costs or expenses. Cost centers have the most scope

Can be divided into different classification methods

1. Basic cost center and compound cost center.

The former has no subordinate cost centers. For example, a section is a cost center, and the latter has several subordinate cost centers. Basic cost center

The cost center has only cost

In the daily logistics operation process, various

The evaluation index of the cost center includes two indicators: the cost (expense) change amount and the cost (expense) change rate.

Cost (expense) change amount = actual liability cost (expense)-budget liability cost (expense)

Cost (expense) change rate = cost (expense) change amount / budget liability cost (expense) × 100%

In every mature

The relationship between management accounting and financial accounting in the R3 system and various business related to expenses processed in management accounting, the main contents are: establishing and maintaining various master data, expense plans and budgets, expense allocation and allocation, expense adjustment, The processing of internal orders, the query of expense reports, etc. In this course, everyone should focus on the planning and budgeting of expenses, the allocation and allocation of expenses, and the query of reports. Financial accounting (FI) is directed at external information needs, such as tax authorities, financial institutions, etc. According to FI, different balance sheets can be prepared to meet external caliber information needs, while control (CO) is used internally by the organization Management is to meet the information needs of management decisions by determining the true costs and actual conditions within the organization. Financial accounting (FI) strictly follows the legal system and bookkeeping rules and is used by external personnel. Control (CO) can flexibly and flexibly adjust external accounts according to the needs of internal management and be used by internal personnel.