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Business studies> Finance> Cost and profit centres

Cost and profit centres are used to look at the costs and profits caused by different departments or sections of a business. Each department or section is known as a centre.

Cost and profit centres may be used to divide up the fixed costs of a company into different departments.

Advantages of using cost and profit centres:
Helps achieve financial control.
Helps organise the business and give it structure.
Helps motivate staff in each centre.