A cost center is a business segment:
A)that usually evaluates employee performance by comparing the center's actual costs with target or standard costs for the amount and type of work done.
B)in which interperiod cost comparisons can be misleading if the output level and production mix are constant.
C)that usually includes individual stores within a department-store chain.
D)that should be evaluated solely on its ability to control and reduce costs.

Question

Quizplus · Accepted Answer

A cost center is a segment of a business that incurs costs but generates no revenue or profit. Therefore, the primary goal of a cost center is to control costs effectively. One common way of evaluating the performance of a cost center is by comparing its actual costs with target or standard costs for the amount and type of work done, making choice A the best answer.

A Cost Center Is a Business Segment