A large home improvement retail company is moving towards a decentralized management system from a centralized system after years in business. They are aware that this will entail generating various responsibility centers and placing the appropriate people in charge. Which of the following would be considered a profit center for the company?
A) The garden center in the store
B) The home projects consulting department
C) The janitorial department
D) The payroll department

Question

Quizplus · Accepted Answer

This question requires familiarity with responsibility centers and how the types of centers differentiate from one another. A profit center will make sales and incur costs and is measured on its ability to hit sales goals while also managing its expenses and achieving a certain amount of profit. Choice A is the only choice listed that is a true profit center. Choices B, C, and D all represent other types of centers.

A Large Home Improvement Retail Company Is Moving Towards a Decentralized