A manufacturer's raw-material purchasing department would likely be classified as a:
A) cost center.
B) revenue center.
C) profit center.
D) investment center.
E) contribution center.

Question

Quizplus · Accepted Answer

A cost center is a department that incurs costs but does not directly generate revenues. A manufacturer's raw-material purchasing department incurs costs through the acquisition of materials needed for production but does not directly sell products or services, making it a cost center.

A Manufacturer's Raw-Material Purchasing Department Would Likely Be Classified as A