Responsibility centre is individual part of business for which manager is fully responsible for performance of that part of business.
Responsibility accounting is also based on this individual part of business.
Responsibility centre can be:
Cost Centre
Profit Centre
Revenue Centre
& Investment Centre
Cost Centre is any identifiable unit of busines for which cost is incurred and recorded.
Profit Centre is any identifiable unit of business fow which cost incurred and revenue earned are identified.
Revenue Centre is business unit which are earning sales revenue.
Investment Centre is that part of business in which manager has to take decision about the investment of assets as well as cost and profit decisions.
Monday, May 16, 2011
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