each enterprise should be divided in the responsibility centers?
The activity of an entity can be structured into units independent from a budgetary point ofview, also called responsibility centers.
The responsibility centre may be defined as “a set of elements dependent on each other, which form an organized whole, having a degree of autonomy in the use and optimization of the resources they possess”.
Responsibility centers include: the revenue centre represents the organizational link in w hich the activity is appreciated as value according to the revenue acquired, such as the sales department within an organization.
The revenue is planned on the basis of the accomplishments in the previous year and of their anticipation for the year on cour se. The management periodically analyses the revenue budget and that of anticipation, and intervenes in the case of deviations. The cost centre represents the organizational link in which products/ services are obtained which generate expenses (costs) with the help of which there can be measured the efficiency and efficaciousness of the centers’ activity.
The cost centers are “subdivisions of the technical - productive, organizational and administrative frame of the enterprise in relation with which there is organized the analytical programming and monitoring of the production expenses.”
The cost centre may be an enterprise, a department, a section, a functional service which collects indirect expenses. This one may be also organized at a workplace, if e xpense budgets can be elaborated.
The profit centre is the operational subdivision which performs its activity by attracting resources which generate revenue.
The profit centre is the organizational centre within which profit can be calculated.
Within profit centers there are produced subsystems, finite products or there are executed services which are sold outside and for which a selling price is calculated.
The division of the enterprise activity into responsibility centers must take into consideration the
The responsibility centre may be defined as “a set of elements dependent on each other, which form an organized whole, having a degree of autonomy in the use and optimization of the resources they possess”.
Responsibility centers include: the revenue centre represents the organizational link in w hich the activity is appreciated as value according to the revenue acquired, such as the sales department within an organization.
The revenue is planned on the basis of the accomplishments in the previous year and of their anticipation for the year on cour se. The management periodically analyses the revenue budget and that of anticipation, and intervenes in the case of deviations. The cost centre represents the organizational link in which products/ services are obtained which generate expenses (costs) with the help of which there can be measured the efficiency and efficaciousness of the centers’ activity.
The cost centers are “subdivisions of the technical - productive, organizational and administrative frame of the enterprise in relation with which there is organized the analytical programming and monitoring of the production expenses.”
The cost centre may be an enterprise, a department, a section, a functional service which collects indirect expenses. This one may be also organized at a workplace, if e xpense budgets can be elaborated.
The profit centre is the operational subdivision which performs its activity by attracting resources which generate revenue.
The profit centre is the organizational centre within which profit can be calculated.
Within profit centers there are produced subsystems, finite products or there are executed services which are sold outside and for which a selling price is calculated.
The division of the enterprise activity into responsibility centers must take into consideration the