Packrall Company makes computer chips.Curtis is manager of the company's maintenance department.Because his maintenance technicians are so well trained in maintaining expensive and sensitive circuit board stamping equipment,Curtis has been authorized to contract to perform maintenance for outside customers.In this company,the maintenance department is likely organized as:
A) A profit center.
B) A revenue center.
C) A cost center.
D) An investment center.

Question

Quizplus · Accepted Answer

A profit center is a department or unit within an organization that generates revenue and also incurs costs, and is accountable for both. In this case, Curtis's maintenance department is not only maintaining internal equipment but also generating revenue by contracting to perform maintenance for outside customers. As the department generates revenue and incurs costs, it can be considered a profit center.

Packrall Company Makes Computer Chips