Dylan's BI Study Notes

My notes about Business Intelligence, Data Warehousing, OLAP, and Master Data Management

Cost Center

A Cost Center is one of the three responsibility centers defined in Responsibility Accounting.

A cost center incurs costs (and expenses) directly but does not generate revenues.

Example: A production or a service department.

Reporting Needs:

A typical report for a cost center is to compare the actual costs with the budget.

When the report shows the actual and budget, only the controllable costs should be included in the report.

A responsibility center should have a manager assigned.  The manager of a cost center is evaluated by  whether he or she can met the department’s goal within the budgeted costs.