Explain the meaning of the following term in the context of cost accounting: - Cost centre.

Explain the meaning of the following term in the context of cost accounting:
- Cost centre.

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Cost Centre

It is a production or service location, functions-activity or item of equipment whose costs may be
attributed to cost units.

Production cost centres are the detriments in which a particular product is made whereas service
cost centres are those which provide a service to the production department such as stores,
maintenance and canteen.

Costs are normally accumulated over cost centre to enable absorption- into production units for
costing purposes.

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marto answered the question on February 15, 2019 at 07:42

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