What does a cost center primarily focus on?

A cost center primarily focuses on controlling costs and expenses. It is a department or unit within an organization that is responsible for managing budgeted expenditures without the expectation of generating revenue directly. The main objective of a cost center is to ensure that its costs stay within the budget and contribute to the overall efficiency of the organization.

This focus on cost management involves monitoring expenses, finding ways to reduce costs, and ensuring that resources are used effectively. Managers of cost centers typically analyze variances between actual and budgeted costs to understand performance and make necessary adjustments. By emphasizing cost control, the organization can enhance profitability indirectly through improved efficiency and reduced operating expenses, which aligns with the overall financial goals without being directly involved in generating income.