Template:Cost centre capsule: Difference between revisions
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A “[[cost center]]” in a firm is a department that does not directly earn revenue but still costs money to operate. [[Cost center]]s therefore only contribute to profitability indirectly, by enabling [[profit centre]]s to operate, helping them operate better, and preventing money made by [[profit centre]]s being lost again. Cost centres may also | A “'''[[cost center]]'''” in a firm is a department that does not directly earn revenue but still costs money to operate. [[Cost center]]s therefore only contribute to profitability indirectly, by enabling [[profit centre]]s to operate, helping them operate better, and preventing money made by [[profit centre]]s being lost again. Cost centres may be, and usually are, also [[waste centre|''waste'' centre]]s, but that is not to say cost and waste centres are the same: to confuse them is to make the fundamental mistake of modern management.<br> | ||
Latest revision as of 10:29, 25 October 2021
A “cost center” in a firm is a department that does not directly earn revenue but still costs money to operate. Cost centers therefore only contribute to profitability indirectly, by enabling profit centres to operate, helping them operate better, and preventing money made by profit centres being lost again. Cost centres may be, and usually are, also waste centres, but that is not to say cost and waste centres are the same: to confuse them is to make the fundamental mistake of modern management.