A unit of a business that not only incurs costs, but also generates revenues, is called a:
A) Performance center.
B) Profit center.
C) Cost center.
D) Responsibility center.
E) Expense center.

Question

Quizplus · Accepted Answer

A profit center is a unit of a business that incurs costs as well as generates revenues. The performance of a profit center is measured based on the profitability of the unit, which is calculated as revenue minus costs. Profit centers are typically given greater autonomy and decision-making power as compared to cost centers. Thus, a profit center is the best choice among the given options.

A Unit of a Business That Not Only Incurs Costs