Which of the following factors under management's control distinguishes an investment centre from a profit centre?
A) Selling prices
B) Output quantity
C) Controllable costs
D) Investment in assets

Question

Quizplus · Accepted Answer

Investment in assets is a factor under management's control that distinguishes an investment centre from a profit centre. An investment centre is a unit of an organization that has control over both its revenue and expenses as well as the assets it uses to generate profits. On the other hand, a profit centre is a unit of an organization that is responsible only for generating profits, typically through the sale of goods or services. Therefore, the level of investment in assets is a key driver of performance for an investment centre, as it affects the unit's ability to generate future profits.

Which of the Following Factors Under Management's Control Distinguishes an Investment