How is performance evaluated for a profit center?
A) Actual costs incurred compared to budgeted costs.
B) Actual segment margin compared to budgeted segment margin.
C) Comparison of actual and budgeted return on investment (ROI) based on segment margin and assets controlled by the segment.
D) None of these.

Question

Quizplus · Accepted Answer

Performance for a profit center is evaluated by comparing the actual segment margin to the budgeted segment margin, as profit centers are primarily concerned with generating revenue and controlling costs to achieve a target profit.

How Is Performance Evaluated for a Profit Center