An organizational unit of a business that incurs costs and generates revenues is known as a(n):
A) Cost center.
B) Sales center.
C) Profit center.
D) Investment center.

Question

Quizplus · Accepted Answer

A profit center is an organizational unit that incurs costs and generates revenues, and is responsible for both the costs and the revenue associated with its operations. A profit center is typically evaluated based on its ability to generate profits, and is given autonomy and authority to make decisions related to the operations of the unit. A cost center, on the other hand, incurs costs but does not directly generate revenues, while a sales center generates revenues but may not be responsible for the costs associated with those revenues. An investment center is a unit that incurs costs and generates revenues, but also has responsibility for making capital investment decisions.

An Organizational Unit of a Business That Incurs Costs and Generates