If a segment of business is considered a profit center

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A profit center is a segment of a business that generates revenue and incurs costs. Therefore, both revenue and cost data must be accumulated for the segment in order to determine its profitability. A profit center may sell products or services to customers outside the business, but it can also serve internal customers within the same company. Indirect expenses can be allocated to the segment as long as they are directly related to the segment's operations.

If a Segment of Business Is Considered a Profit Center