A responsibility center in which a manager is responsible for both revenues and costs is a(n)
A) cost center.
B) revenue center.
C) profit center.
D) investment center
E) None of these.

Question

Quizplus · Accepted Answer

A profit center is a responsibility center in which a manager is responsible for both revenues and costs, with the goal of generating a net profit. In contrast, a cost center is responsible only for costs, a revenue center is responsible only for revenues, and an investment center has the added responsibility of capital investments. Therefore, choice (C) is the best answer.

A Responsibility Center in Which a Manager Is Responsible for Both