Ecom

Responsibility accounting is the process of appointing authority and responsibility to managers of subunits, and then determining and estimating their performance. Under responsibility accounting, managers are held responsible only for factors over which they have control. (http://www2.accaglobal.com).

Cost centres in cost centres, managers are responsible only for the costs under their control. Some centers provide support services costs to ease of accessibility monitor because their output is measured. Cost center is also used to produce subunit of goods or services eventually sold to others. Managers at these centers are responsible for the cost of producing goods or services more efficiently. Cost center managers are expected either to reduce the cost per output or to maximize the output of the cost. Cost center performance is measured and monitored a number of ways. Some organizations actually cost budget and differences. Measure other factors such as the quality and timeliness of delivery is also relevant. There are few examples of responsibility centres which are, manufacturing departments, service production departments, such as road maintenance for a city, and support departments, such as accounting and billing departments in a hospital.

Revenue centres are responsibility centres whose members control revenues but do not control either the manufacturing or the acquisition cost of the product or service they sell or the level of investment made in the responsibility center. If the manager in a revenue centre is responsible for setting prices, gross revenues can be used as a performance measure. If corporate headquarters rather than the manager sets price, then managers’ performance can be evaluated using a combination of sales volumes measured in units and sales mix.