ECONOMICS

Detailed explanation-1: -A cost center is a function within an organization that does not directly add to profit but still costs money to operate, such as the accounting, HR, or IT departments. The main use of a cost center is to track actual expenses for comparison to the budget.

Detailed explanation-2: -Alternatively, a multinational corporation might have separate cost centers such as human resources (HR), accounting department and administrative staff.

Detailed explanation-3: -There are two main types of cost centres: Production cost centres, where the products are manufactured or processed. Example of this is an assembly area. Service cost centres, where services are provided to other cost centres.

Detailed explanation-4: -A cost center is also known as a cost pool or expense center.