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Cost, Profit, and Investment Centers

Companies are often organized into departments by functions, such as operations, marketing, sales, corporate headquarters, etc. Typically, each one of these departments is then assigned specific responsibilities and referred to as either a cost center, a profit center, or an investment center.

To prepare for this Discussion, “Shared Practice: Cost, Profit, and Investment Centers,” review the Portz & Lere article in the Learning Resources for this week. Consider what you know from your professional background, the resources, research, and/or the regulatory environment in your home country.

Post by Day 3, the following:

• Analyze how cost center accounting practices in German companies differ from the practices in your current or previous organization or one with which you are familiar.
• Explain which country’s accounting practices you would prefer to use for your organization and why. Be sure to provide your rationale by using specific examples.
• Provide an example of a profit center taken from your professional experience, the resources, or research. Explain why this is a profit center, including the methods of performance evaluation, and explain how it contributes to the success of the organization.
• Provide an example of an investment center taken from your professional experience, the resources, or research. Explain why this is an investment center, including the methods of performance evaluation, and explain how it contributes to the success of the organization.