Question

Question type: Multiple choice single select
In what way correct identification of cost centre helps in the process of cost accounting
It facilitates the fixation of responsibilities in correct manner.
It protects the legal interest of the undertaking
It maintains the records of the business organization.
It is legally necessary to identify the cost centres in the business organizations.​

Answer 1

Answer:

A cost center is a department or function within an organization that does not directly add to profit but still costs the organization money to operate. Cost centers only contribute to a company's profitability indirectly, unlike a profit center, which contributes to profitability directly through its actions. Managers of cost centers, such as human resources and accounting departments are responsible for keeping their costs in line or below budget.