Responsibility Center Definition In accounting, a responsibility center refers to an organizational subunit in a corporation. For instance, a large corporation may consist of numerous smaller business groups or divisions, some or all of these organizational subunits could be set up as responsibility centers. The manager of a responsibility center is responsible for the activities
Profit Center Definition In accounting, a profit center is a type of responsibility center. A responsibility center is an organizational subunit the manager of which is responsible for certain financial and non-financial performance measures. Furthermore, for accounting purposes, consider a responsibility center – in this case a profit center – a distinct entity within the
See also: Cost Driver Variable vs Fixed Cost Sunk Costs Activity Based Costing vs Traditional Costing Removal Cost Profit Center Responsibility Center Adding Value as a Financial Leader Cost Center Definition In accounting, a cost center is a type of responsibility center. A responsibility center is an organizational subunit the manager of which is responsible
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