SBUs that generate revenues and incur the major portion of the cost for producing those revenues are:

Question

Quizplus · Accepted Answer

Profit centers are responsible for generating revenues and incurring the major portion of the cost for producing those revenues. The main objective of profit centers is to maximize profits. Therefore, they are evaluated based on their profit and loss statements, and they have the autonomy to make their own decisions about pricing, marketing, and cost control. Revenue centers only generate revenues, but they do not have to bear the cost of production. Contribution centers are responsible for generating revenues and covering only their direct costs, but not all the costs associated with producing those revenues. Cost centers incur costs, but do not generate revenues or profit. Investment centers are evaluated based on their return on investment (ROI) and are responsible for both generating revenues and making investments.

SBUs That Generate Revenues and Incur the Major Portion of the Cost