2. An example of personal cost centre is A) Machinery C) Maintenance department B) Store yard D) Foreman
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Explanation:
A cost centre which consists of a person or group of persons is called 'personal cost centre'. Example: sales manager, works manager, etc. An impersonal cost centre consists of a location or item of equipment, production department, a machine or a group of machines
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An example of a personal cost center is option D) Foreman.
What are a personal cost center and its examples?
- Personal cost center consists of a person or a group of persons like sales manager, general manager, regional manager, production manager, etc.
- Thus the correct option is D) Foreman who is a person who is in charge of a specific work like supervising a team or workplace.
- The other options like machinery, maintenance, and store yard fall under the division impersonal cost.
- Personal cost center is a type of cost center that cannot generate profit on its own but it is a core function to run a business successfully.
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