ABSTRACT
The term cost center refers to a significant unit
for which costs are accumulated. Cost centers may
be established for the purpose of expense control or
for costing output (or service levels) of a firm.
For the former purpose, a cost center is an
organizational segment (such as a terminal) of the
firm that is also a major expense area. Expenses
related to cost centers are assigned to the
appropriate cost center. For each cost center,
management can compare and evaluate the assigned
expenses over time for the purpose of expense
control.
