Meaning of Cost Centre and Cost Unit Explained

What is a Cost Centre? A cost centre is a function or department within an organization that incurs expenses but does not directly contribute to revenue generation. Examples of cost centres include accounting, human resources (HR), and information technology (IT) departments. The primary purpose of a cost centre is to track expenses, compare them to…

Classifications and Elements of Cost

Classification of Costs Costs can be classified in various ways, including by function, behavior, and traceability. Below are some common types of cost classifications: Elements of Cost Costs can also be classified by type, function, variability, and more. Broadly, there are three primary categories in this classification: Understanding these classifications and elements is crucial for…