Asked by Rosemary Rubino on Jul 25, 2024
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A profit center is responsible for generating revenue, but it is not responsible for controlling costs.
Profit Center
A business segment whose manager has control over cost and revenue but has no control over investments in operating assets.
Revenue
The complete sum of revenue a business earns from sales of goods or provision of services within a designated timeframe.
Controlling Costs
The process of monitoring, managing, and regulating expenses to operate within the budget and maximize profitability.
- Recognize the differences between profit, cost, and investment centers in terms of responsibility and performance evaluation.
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Learning Objectives
- Recognize the differences between profit, cost, and investment centers in terms of responsibility and performance evaluation.
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