Accounting

Responsibility Centers Slide 1: Introduction Welcome to today’s training session. This is an overview of responsibility centers and their budgeting processes. We will discuss the types of responsibility centers, their accountabilities, and the use of incremental analysis for decision making. Slide 2: Definition of Responsibility Center A Responsibility center is an accounting classification that helps to identify the function, segment, product line or department within a business. They are used to assign accountability and authority to different areas of a business. Slide 3: Types of Responsibility Centers There are several types of responsibility centers. These include cost centers, profit centers, revenue centers, and investment centers. Each type is responsible for different areas of operations and is responsible for different goals. Slide 4: Cost Centers Cost Centers help to distinguish and keep track of spending by functional area. They are responsible for recording, monitoring, and controlling costs in their respective areas. Examples of cost centers include departments like maintenance and purchasing. Slide 5: Profit Centers Profit centers help to measure the activity and profitability of a particular department. They are responsible for tracking budget and contain a budget for costs and revenues. They are responsible for creating as much profit as possible from their respective areas. Examples of profit centers include departments like