Responsibility centre
Responsibility centre is an organisational unit whose manager is held formally accountable for a defined set of financial results, such as costs, revenues, profit, or return on investment.
Also known asresponsibility center
FrameworkResponsibility accounting
See it move
A four-step vertical flow arranges responsibility-centre types in ascending order of managerial scope, with each box connected to the next by a connector labelled 'broader scope'. The first box describes a cost centre (costs only, judged against budget), the second a revenue centre (revenue only, judged against a sales target), the third a profit centre (both costs and revenue, judged on profit), and the fourth an investment centre (costs, revenue, and the capital base, judged on return on investment).
Check yourself
Which sequence correctly orders the four responsibility-centre types from narrowest to broadest accountability?