Question

In a ________, the manager is responsible for generating revenues and controlling costs.

A) cost center
B) profit center
C) revenue center
D) transfer pricing center

Answer 1

In a profit center, the manager is responsible for generating revenues and controlling costs. If the center has a positive contribution margin, it should continue in business. A profit center is a unit within an organization that has both revenues and costs associated with it, and its purpose is to generate profits.

Step-by-step explanation:

In a profit center, the manager is responsible for generating revenues and controlling costs. A profit center is a unit within an organization that has both revenues and costs associated with it, and its purpose is to generate profits for the overall organization. In this case, the center earns revenues of $20,000 and variable costs are $15,000, meaning it has a positive contribution margin of $5,000. Therefore, the center should continue in business.

profit center, the manager is responsible for generating revenues and controlling costs. A profit center is a unit within an organization that has both revenues and costs associated with it, and its purpose is to generate profits for the overall organization. In this case, the center earns revenues of $20,000 and variable costs are $15,000, meaning it has a positive contribution margin of $5,000. Therefore, the center should continue in business.