Asked by Austin Bogle on Jul 29, 2024
Verified
A segment of a business responsible for both revenues and expenses would be called:
A) a cost center.
B) an investment center.
C) a profit center.
D) residual income.
Cost Center
A department or segment within a company where costs can be allocated, but that does not directly contribute to profit, primarily used for budgeting and control purposes.
Investment Center
A business unit or division that is responsible for its own revenues, expenses, assets, and returns, and is evaluated on its profitability and efficiency in using its assets.
Profit Center
A department or unit within an organization that is responsible for generating revenue and is evaluated based on its profitability.
- Identify the distinctions among profit, cost, and investment centers regarding their accountability and performance assessment.
Verified Answer
Learning Objectives
- Identify the distinctions among profit, cost, and investment centers regarding their accountability and performance assessment.
Related questions
Residual Income Should Be Used to Evaluate an Investment Center ...
A Cost Center Is a Responsibility Center
A Profit Center Is Responsible for Generating Revenue, but It ...
A Selling Department Is Usually Evaluated as a Profit Center
Support Departments Within an Organization Such as Information Technology, Cannot ...