Responsibility centres

Cost centres

Departments where the manager has control over the costs incurred but not over revenue, and their performance is judged based on cost control.

Revenue centres

Departments where the manager has control over revenue generation only, and their performance is evaluated solely based on meeting revenue targets.

Profit centres

Departments where the manager controls both costs and revenues, and their performance is measured in terms of meeting overall profit targets.

Investment centres

Similar to profit centres, where the manager is responsible for revenue, costs, and investment decisions like new projects or machinery purchases, and their performance is evaluated based on cost control, revenue generation, and return on investments.