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What do you understand by cost center, profit center in Controlling? |
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Answer» A Cost center is defined as a component in an organization that adds to the cost and indirectly adds to profit if the organization. Examples include Marketing and Customer Service. A company can classify business unit as profit center, cost center or an investment center. The simple and straight forward division in an organization can be classified as cost center as cost is easy to measure. SAP CO-Profit center is used for managing internal controlling. When you dividing your company into profit centers, it allows you to delegate responsibility to decentralized units and allows you to treat as separate companies in a company. |
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