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    The document discusses the key differences between cost centers and profit centers. It states that profit centers directly contribute to profits through revenue generation and have independent business targets, while cost centers provide indispensable support services and are responsible for losses. Support centers can help reduce costs for profit centers. The document provides the example that in a business process outsourcing (BPO) firm, human resources would be considered a profit center as revenue depends on services, but in a product-based company HR would be a cost center.

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    The document discusses the key differences between cost centers and profit centers. It states that profit centers directly contribute to profits through revenue generation and have independent business targets, while cost centers provide indispensable support services and are responsible for losses. Support centers can help reduce costs for profit centers. The document provides the example that in a business process outsourcing (BPO) firm, human resources would be considered a profit center as revenue depends on services, but in a product-based company HR would be a cost center.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    2 views4 pages

    Human Resource Management

    Uploaded by

    piya_thakral
    The document discusses the key differences between cost centers and profit centers. It states that profit centers directly contribute to profits through revenue generation and have independent business targets, while cost centers provide indispensable support services and are responsible for losses. Support centers can help reduce costs for profit centers. The document provides the example that in a business process outsourcing (BPO) firm, human resources would be considered a profit center as revenue depends on services, but in a product-based company HR would be a cost center.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 4

    Human resource management

    8/25/12

    PRESENTATION ON THE CONCEPT OF:COST CENTER & PROFIT CENTER

    BY:-

    PRESENTED

    A COMPARATIVE VIEW OF COST & PROFIT CENTER: PROFITCENTER COST CENTER

    8/25/12

    Support Center contribute to the profit by reducing the cost services are utilized when needed service is Independently run depend on ROI or ROTI

    Functional Directly

    Center

    Indirectly

    contribute to the profit Departments are Indispensible function is Interdependent & directly responsible for loss

    Support

    Functional

    Each

    Each

    Services

    8/25/12

    CENTER Support service can be Outsourced in many Organization


    Presence

    COST

    PROFIT Each

    CENTER

    Profit center is a Independent Business Channels Tangible in nature(i.e. expressed in terms of revenue) involve with Forward Integration Periodic Targets be Outsourced is

    create Efficiency & Absence create total Inefficiency centers compliment Profit Generation Process

    Performance

    Support

    Generally

    Have

    Can

    8/25/12

    EXAMPLE: Question:-

    Is HR as a Department is a Profit Center or a Cost Center in a BPO? In BPO or Services HR is a Profit Center because the whole Revenue is related to Services while in case of any Product HR is a Cost Center not a Profit Center.

    Answer:-

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