The manager of Center A is responsible for generating cash inflows and incurring costs with the goal of making money for the company. The manager has no responsibility for assets. What type of responsibility center is Center A?
A) Cost center
B) Discretionary cost center
C) Profit center
D) Revenue center

Question

Quizplus · Accepted Answer

A profit center is responsible for generating revenue and incurring costs with the goal of making a profit for the company. The fact that the manager has no responsibility for assets indicates that Center A is not a investment center, which would have responsibility for managing assets to generate a return on investment. Center A is not a cost center because its goal is to make money, not just control costs. It is not a revenue center because it also incurs costs. Therefore, the best choice is C, profit center.

The Manager of Center a Is Responsible for Generating Cash