Aibir is preparing for his annual review with the VP. He has spent the last week reviewing the monthly reports focusing on sales made by his sales representatives. Overall, he thinks he is in a good position as he has made 103% of his key performance indicators (KPIs) for sales, and his expenses are within 1.5% of the budget. During the meeting, the VP comments that Aibir's sales numbers are good and he is happy with the expense management. What kind of responsibility center is Aibir's department?
A) The department is a cost center because Aibir is only responsible for expenses.
B) The department is a profit center because Aibir is responsible for generating sales revenues and maintaining expenses.
C) The department is a revenue center because Aibir is only concerned with sales.
D) The department is an investment center because Aibir is reviewing the monthly reports.

Question

Quizplus · Accepted Answer

When a department is evaluated based on their sales (revenue) and expenses, the department is classified as a profit center.

Aibir Is Preparing for His Annual Review with the VP