The type of department that generates revenues and incurs costs,and its manager is responsible for the investments made in operating assets is called a(n):
A)Profit center
B)Cost center
C)Service department
D)Investment center
E)Responsibility center

Question

Quizplus · Accepted Answer

An investment center is a type of department that generates revenues and incurs costs, and its manager is responsible for the investments made in operating assets. The manager of such a center is evaluated based on the center's profitability, as well as the return on investment (ROI) and other financial measures. Profit centers and service departments also generate revenues and incur costs, but their managers are typically evaluated based on other metrics such as sales volume or customer satisfaction, rather than ROI. Cost centers, on the other hand, only incur costs and do not generate revenues.

The Type of Department That Generates Revenues and Incurs Costs,and