Question

In a profit center, the department manager has responsibility for and the authority to make decisions that affect: ___________

a. not only costs and revenues, but also assets invested in the center
b. the assets invested in the center, but not costs and revenues
c. both costs and revenues for the department or division costs and assets invested in the center, but not revenues

Answer 1

Answer:

a. not only costs and revenues, but also assets invested in the center

Explanation:

A profit centre is defined as a segment of a company that is a standalone and determines the profit and losses of the entire company which are calculated seperately.

It also generates it's earnings and revenues independently.

The opposite of the profit centre is called the cost centre that does not earn any revenue but rather consumes revenue from other departments.

The profit centre also determines allocation of resources to various activities in the future.