What is Revenue Center?

Definition of Revenue Center

In a revenue center, outputs are measured in monetary terms, but no formal attempt is made to relate inputs (i.e. expenses or costs) to outputs. Revenue centers are, marketing organizations that do not have profit responsibility. Actual sales or orders booked are measured against budgets or quotas. Each revenue center is also an expense center in that the revenue center manager is held accountable for the expenses incurred directly within the unit. The primary measurement, however, is revenue. Revenue centers are not charged for the cost of the goods that they market. Consequently, they are not profit centers. Revenue centers do not typically have authority to set selling prices.

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