A department that incurs costs without directly generating revenues is a:
A) Service center.
B) Production center.
C) Profit center.
D) Cost center.
E) Performance center.

Question

Quizplus · Accepted Answer

Cost center is a department or unit that is responsible for incurring costs without generating revenues or profits for the organization. The main objective of a cost center is to control expenses and ensure efficient use of resources to support the overall operations of the organization. Examples of cost centers include HR, IT, and administration departments.

A Department That Incurs Costs Without Directly Generating Revenues Is