The Meaning and Definition of Cost Centre. (Cost Accounting
Cost centres are the smallest segments of activity or area of responsibility for which costs are accumulated or ascertained.
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It may be defined as “a location, person or item of equipment for which costs may be ascertained and used for the purpose of cost control”.
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Generally cost centres are departments or sub-department of the organisation. Sometimes a department may also contain several cost centre. For example in an organisation, factory department is a cost centre. It contains several sections, as welding, molding, repair section etc. Each section is also treated as cost centre.