Page 28 - BA2 Integrated Workbook - Student 2017
P. 28
Chapter 2
Cost centre
A cost centre is ‘a unit of product or service in relation to which costs are
ascertained’. A cost centre is used as a ‘collecting place’ for costs. There
are many types of cost centres.
Examples of cost centres in relation to a hotel:
Type Example
Service location Reception
Function Cleaning
Activity Room service
Cost object
A cost centre as anything for which a cost can be ascertained. The
CIMA Terminology gives the following examples for cost objects: a
product, service, centre, activity, customer or distribution channel.
All of the cost units and cost centres we have described earlier in this chapter are
therefore types of cost object.
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