A profit center is
A) a responsibility center that always reports a profit.
B) a responsibility center that incurs costs and generates revenues.
C) evaluated by the rate of return earned on the investment allocated to the center.
D) referred to as a loss center when operations do not meet the company's objectives.

Question

Quizplus · Accepted Answer

A profit center is a responsibility center that incurs costs and generates revenues. It is responsible for both generating revenue and controlling costs. Profit centers are evaluated based on their ability to generate profits and contribute to the overall success of the organization. The other options are incorrect as they do not correctly describe what a profit center is.

A Profit Center Is