Question

marketing department comes under which type of responsibility center

Answer 1

Responsibility centres can be classified by the scope of responsibility assigned and decision-making authority given to individual managers.

The following are the four common types of respon­sibility centres:

1. Cost Centre:

A cost or expense centre is a segment of an organisation in which the managers are held re­sponsible for the cost incurred in that segment but not for revenues. Responsibility in a cost centre is restricted to cost. For planning purposes, the budget estimates are cost estimates; for control purposes, performance evaluation is guided by a cost variance equal to the difference between the actual and budgeted costs for a given period. Cost centre managers have control over some or all of the costs in their segment of business, but not over revenues. Cost centres are widely used forms of responsibil­ity centres.