There are different aspects of control concepts for measurement of effectiveness and efficiency at three different levels of management. Similarly there are different control concepts for measuring the effectiveness of various units/divisions of firm. One of the important ways of measuring performance of sub-functions,divisions and units is to treat them as separate responsibility centers. A Responsibility Center is an activity center of the corporation entrusted with a special task. In modern budgeting and control, financial executives tend to develop responsibility centers for purposes of control. They can be classified into three categories: Cost Centers Profit Centers Investment Centers COST CENTER In the cost center approach , efficiency is measured on the basis of costs incurred in relation to the standard or budgeted costs. Cost center is effective in case of operations such as production,maintenance and certain service departments, as it is n...