Question

Which of the following statements is correct about the connection between cost centers and revenue?

A) Cost centers do not directly generate revenue from customers, and they have no impact on the customer experience.
B) Cost centers do not directly generate revenue from customers, but they may have an impact on revenue through customer satisfaction and overall quality.
C) Cost centers are the primary driver of revenue from customers.
D) Cost centers directly generate revenue from customers.

Answer 1

B) Cost centers do not directly generate revenue from customers, but they may have an impact on revenue through customer satisfaction and overall quality.

Step-by-step explanation:

Cost Centers are functions where costs are accumulated.

Cost centers do not generate revenue, but they do have impact on revenue since price determination lies on the cost if the company is to make profit.

Costs also determine the quality of the final product to customer and the satisfaction there-off - which are vital for driving revenue.