Profit center

[Former Member]

Hello Friends.

Please give me the difference between Cost Center and Profit center in OM.

Regards.

Vishal

[Former Member]

Thankyou friends for the helpful answer.

Regards

Vishal

[former_member47879]

Profit Centers generate income

Cost centers dont

Eg- In the India we have some MNC IT companies those IT companies are Cost centers.Their USA offices or UK office would be profit centers.

US and UK office will be participating in the bidding and win the projects and give that work to the Indian counterparts to work on it..

thanks

[Former Member]

Hi Vishal,

Cost center is the organizational unit that incur costs (e.g. salaries, transportation, travel costs, production costs) (in general each department is defined as a cost center).

Profit center, on the other hand, refer to the units of the enterprise that are divided according to responsibility of profits; they are units that incur profit. E.g. Geographical Division, Product-Related Division, Functional Division of profit centers are possible.

Regards,

Dilek