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Accounting & Tax vocabulary · Costs & Budgeting

Cost center

Meaning in accounting & tax, with examples

nounCommon term

In accounting & tax, cost center means: A department or unit, such as HR, IT or a production line, to which costs are assigned so that managers can track and control spending.

In Turkish: maliyet merkezi, masraf yeri, gider yeri

How it is used

Each cost center has a code and an owner responsible for its budget. The British spelling is cost centre. A profit center, unlike a cost center, is also measured on its revenue.

Example sentences

  1. Please charge the training costs to the HR cost center.

  2. Each cost center manager gets a monthly report of actual spending versus budget.

Common collocations

  • cost center code
  • charge to a cost center
  • cost center manager
  • profit center
  • budgetA financial plan that sets out expected income and spending for a future period, usually a year, and is used to control costs and compare actual results.
  • overheadThe ongoing costs of running a business that cannot be linked directly to one product or service, such as rent, utilities, office staff and IT.
  • varianceThe difference between a planned or budgeted amount and the actual result. It is favourable if the result is better than planned and adverse if it is worse.
  • management accountingThe branch of accounting that prepares internal information, such as budgets, cost analysis and performance reports, to help managers make decisions.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Costs & Budgeting

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This page explains English vocabulary for learners. It is not financial advice.