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But in most corporate environments, cost centers are not expected to generate a profit and operation costs are treated as overhead. Departments that are typically cost centers include information technology, human resources, accounting, and others.
Both cost and profit centers would add something to the bottom line of companies. Profit centers could generate profits for companies. Cost centers would reduce costs therefore increase profits for companies. Sometimes, a cost center in one company may be a profit center in some other company. Thus, a center that directly relates to the core competence of the company is usually a profit center and all other centers that do not have directly related to core business would be cost centers...
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Common topics in this essay:
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