Quality Metal Service Essay Example for Free

Quality Metal Service EssayAn overview of terms, sugar, revenue, and investiture centers damage motley in accounting withal involves the allocation of embody, revenues and responsibilities to assorted concentrate ons or departments. These centres include== Cost centres== revenue enhancement centres== gain centres== enthronization centresCost affectionatenesssA exist centre (CC) is a unit, location or department where cost data is collected. The purpose of the cost centre is to collect, analyze and ascertain costs in its immediate context. Cost centres usually have cost unitsunits or equipment for which costs are determinable or attributable. Overheads and direct costs constitute the cost structure of a CC. Since many activities in an organisation involve costs, a cost centre is a fundamental aspect, especially as profit and enthronisation centres can be cost centres.According to the ACCA Study Text (Management accounting, c 1999), cost centres can manifest themse lves as a project, a machine, department or overhead costs. One should note that a specific cost centre energy not needs have other functions. CCs are not limited to production and manufacturing, since they can as well as be attributed to service centres, like commercial bank branches for example.Revenue CentresThese centres deal exclusively with revenue. Even though costs may arise from these areas, the revenue centre is not accountable for costs. Its purpose is generally to maximise sales and revenue.Profit centreThe profit centre addresses both costs and revenue. Therefore, the theatre director responsible for a profit centre is accountable for the purchases and sales for that unit, department or branch. Since both revenue and costs repay under the purview of the profit centre, it is both a cost and revenue centre, although a revenue centre is not a profit centre and a cost centre might not necessarily be a profit centre.Investment centresInvestment centres are profit cent res that are accountable for cost, revenues and shekels assets for large(p) investment. This unit is assessed by return on investment and is a cost centre. Managers in an investment centre are responsible for purchasing capital or non-current assets and making investment decisions with capital.Investment centresInvestment centres are profit centres that are accountable for cost, revenues and net assets for capital investment. This unit is assessed by return on investment and is a cost centre. Managers in an investment centre are responsible for purchasing capital or non-current assets and making investment decisions with capital.Responsibility centres are the umbrella term for cost, profit, revenue and investment centres, since their surgical procedure is under the direct control of a manager. The cost centre concept is present in profit and investment centres. The profit centre can be stand alone or, with additional responsibilities, an investment centre. Revenue centres operate in a similar manner to cost and profit centres, but their managers are primarily responsible for maximizing revenues and sales. An accountant needs to know the different types of centres to understand the information needs and requirements of the managers of the various units.Responsibility CentresA tariff centre is an organizational subsystem charged with a well-defined mission and headed by a manager accountable for the performance of the centre. Responsibility centres constitute the primary building blocks for management control. It is also the fundamental unit of analysis of a budget control system. Aresponsibility centre is an organization unit headed by a responsible manager. There are four major types of responsibility centres cost centres,revenues centres, profit centres and investment centres.Cost CentreA cost centre is a responsibility centre in which manager is held responsible for controlling cost inputs. There are two general types of cost centres engineered write of f centres and discretionary expense centres. Engineered costs are usually expressed as standard costs. A discretionary expense centre is a responsibility centre whose budgetary performance is based on achieving its goals by operate within predetermined expense constraints set through managerial judgement or discretion.Revenue CentreA revenue centre is a responsibility centre whose budgetary performance is measured primarily by its ability to generate a specified level of revenue.Profit CentreIn a profit centre, the budget measures the difference between revenues and costs.Investment CentreAn investment centre is a responsibility centre whose budgetary performance is based on return on investment. The uses of responsibility centres depend to a great extent on the type of organization structure involved. Engineered cost centres, discretionary expense centre, and revenue centres are more often used with functional organization designs and with the function units in a intercellular su bstance design. In contrast, with a divisional organization designs, it is possible use profit centres because the large divisions in such(prenominal) a structure usually have control over both the expenses and the revenues associated with profits.