CIMA Fundamentals of Management Accounting (BA2) Practice Exam

A responsibility centre is the part of the organisation for which a manager has authority to plan, control, and be judged on its performance. It’s the department or function whose results the manager is directly responsible for, whether it’s a cost centre, a revenue centre, a profit centre, or an investment centre. The other terms describe costs or concepts not about a unit under a manager’s direct control: a controllable cost is something the manager can influence, environmental external failure costs relate to quality costs outside internal control, and an uncontrollable cost is one the manager cannot influence.