Question

A unit of a business that not only incurs costs but also generates revenues is called a: Group of answer choices Performance center. Profit center. Cost center. Responsibility center. Expense center.

Answer 1

Answer: Profit Center

Step-by-step explanation:

A Profit Center in a business is defined as a unit or segment that incurs cost but generates revenue as well. It therefore expends company resources in other to make the company revenue and so is the embodiment of the quote, spend money to make money.

An example of a Profit Center in a business would be the Sales Department. Here money is spent on wages, telephone bills, transport costs etcetera. However, by incurring these costs to sell the products of the company, the department makes revenue as well.