Types of Cost Centre
(i) Personal Cost Centre:
Personal cost centre consists of a person or group of persons.
(ii) Production Cost Centres:
These centres are engaged in production work. It is a centre where production is carried on. Machine shops and welding shops are examples of production cost centre. Cost of direct materials, direct labour, chargeable expenses and factory overheads are charged to this centre.
(iii) Service Cost Centre:
These centres render services to production centres. Only indirect costs are charged to this centre. Important service centres are:
(a) Material Service Centre – which deals with handling and upkeep of stores, internal transport;
(b) Personnel service centres like personnel department.
(c) Plant maintenance centre.
(d) Administration centres like general office, accounts office, etc.
