Which of the following might you expect to see being used as a performance measure for a revenue centre?
A) Actual business unit profit compared with budget business unit profit
B) Standard cost variances
C) Actual business unit revenue compared with budget business unit revenue
D) Both standard cost variances AND actual business unit revenue compared with budget business unit revenue

Question

Quizplus · Accepted Answer

A revenue centre is focused on generating revenue, so it would make sense to use actual business unit revenue compared with budget business unit revenue as a performance measure. Option A refers to a profit centre and option B refers to a cost centre, which are different types of centres with different performance measures. Option D is partially correct, but standard cost variances are not typically used as a performance measure for a revenue centre.

Which of the Following Might You Expect to See Being