A Responsibility Centre is a segment of an organization for which a particular Executive is responsible . There are THREE types of Responsibility Centre :
- Expense / Cost Centre : Expense / Cost centre is a responsibility centre in which inputs or expenses are measured in monetary terms , whereas outputs are measured in monetary terms .
- Profit Centre : A Profit Centre is a part of a business which is expected to make an identifiable contribution to organization’* profits .
- Investment Centre : An Investment Centre is a business unit that can utilize capital to contribute directly to a company’* profitability . Companies evaluate the performance of investment centre according to the revenue it brings in through investment in capital assets compared to the overall expenses .
