Question 1

The IT support department of a global fintech company provides internal services to other departments. The manager of the IT department has control over staffing costs, software licenses, and equipment maintenance, but does not generate external revenue or make decisions on capital investments.

What type of responsibility center is the IT support department?

Accepted Answer

Evaluate what the manager has control over. If it's only costs, it's a cost center.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Assuming internal chargebacks make it a profit center (unless explicitly stated as an artificial profit center, it remains a cost center).

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA MA — Management Accounting Practice Exam 1

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