Under which of the following conditions would a cost center be the best option?
A)Always,since they are largely run on their own
B)Never,since they require a high degree of the firm's attention
C)As long as the cost of monitoring is low
D)As long as the benefits from monitoring are low

Question

​Under which of the following conditions would a cost center be the best option?
A)​Always,since they are largely run on their own
B)Never,since they require a high degree of the firm's attention
C)As long as the cost of monitoring is low
D)​As long as the benefits from monitoring are low

Quizplus · Accepted Answer

A cost center is a department or unit within a company that does not generate revenue on its own but incurs costs. It is best to use a cost center when the cost of monitoring is low because the benefits of monitoring are negligible. In other words, if a department or unit is not generating revenue or contributing significantly to the overall profitability of the company, then it may not be cost-effective to allocate significant resources to monitor its performance. However, if the department is generating significant revenue, contributing to the profitability of the company, or has a high risk of incurring significant costs, then it may be beneficial to allocate resources to monitor its performance.

​Under Which of the Following Conditions Would a Cost Center

Under Which of the Following Conditions Would a Cost Center