What is cost center
Pega. A cost center is part of an organization that does not produce direct profit and adds to the cost of running a company. Employees and cost center management are responsible for its costs but not for the revenues or investment decisions.ypically, companies classify business units as either cost centers, profit centers or investment centers. While the cost of running a particular department is easy to measure, cost centers create incentives for managers to underfund their units in order to benefit the cost center.