Profit centres
A) have responsibility for controlling costs as well as revenues.
B) control and report costs only.
C) measure income and relate that income to their invested capital.
D) are the same as investment centres.

Question

Quizplus · Accepted Answer

Profit centres have responsibility for both controlling costs and generating revenues. The profit centre manager is accountable for the profit or loss of the centre and has authority to make decisions related to pricing, cost control, and investments. Therefore, option A is the best choice. Option B is incorrect as profit centres also report revenues. Option C refers to investment centres, not profit centres. Option D is incorrect as investment centres are responsible for generating returns on invested capital, whereas profit centres are responsible for generating profits.

Profit Centres