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What is a cost center? A cost center is often a department within a company. The manager and employees of a cost center are responsible for its costs but are not responsible for revenues or investment decisions. A manufacturer's cost centers include each of its production departments as well as the manufacturing service departments such as the maintenance department or quality control department.
Difference between a cost centre and a profit centre. A cost centre adds to a firm's cost whereas a profit centre adds to the firm's cost and profit. Furthermore, the main objective of a cost centre is to minimise cost whereas the main objective of a profit centre is to maximise profit.