 Standard cost centers are production units in which inputs (material, labor, machine hours) are specified and outputs can be measured in financial terms. The difference between the actual cost and the standard cost is known as the variance. (Carter, et al, 1997) Example: The production units in the multinational's factories are standard cost centers.  Discretionary spending centers are cost centers where output cannot be measured in financial terms. (Drury, 2005) Example: Includes departments such as human resources, research and development, marketing – advertising, etc. A cost center indirectly increases the company's revenue, for example money spent on research and development leads to innovative products, increasing sales and therefore profits of the business. Performance evaluation: The performance of a cost center manager is evaluated by a complex system of cost variances that compare actual performance with budgeted performance. (Please refer to Appendix 1)3.2. Revenue Centers: A revenue center is a responsibility center where the manager is held accountable for the sale of finished goods produced by manufacturing departments or services provided by discretionary spending