Which of the following statements regarding profit centers is correct?
A) A manager of a profit center has more responsibility than a manager of an investment center.
B) A manager of profit center is evaluated only on his/her ability to control costs.
C) A manager of a profit center is evaluated on his/her ability to control costs and generate revenues.
D) A manager of a profit center is responsible for assets,liabilities,and earnings.

Question

Quizplus · Accepted Answer

A cost center is an organizational unit that incurs expenses but does not generate revenue.A profit center differs from a cost center in that it not only incurs costs but also generates revenue.The manager of a profit center is judged on his ability to produce revenue in excess of expenses.

Which of the Following Statements Regarding Profit Centers Is Correct