Which of the following statements regarding profit centers is correct? Multiple Choice A manager of a profit center is evaluated on his/her ability to control costs and generate revenues. A manager of a profit center is responsible for assets, liabilities, and earnings. A manager of a profit center is evaluated only on his/her ability to control costs. A manager of a profit center has more responsibility than a manager of an investment center.

Question

Ellis Mcdowell

Business

5 January, 16:43

Which of the following statements regarding profit centers is correct? Multiple Choice A manager of a profit center is evaluated on his/her ability to control costs and generate revenues. A manager of a profit center is responsible for assets, liabilities, and earnings. A manager of a profit center is evaluated only on his/her ability to control costs. A manager of a profit center has more responsibility than a manager of an investment center.

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Charity Lutz · Answer 1

A manager of a profit center is evaluated on his/her ability to control costs and generate revenues.

Explanation:

A profit center can be described as a segment of a company that is responsible for the generation of revenues through the sale of various goods and services. The management of an organisation closely monitors the result of a profit center as it largely determines the growth of the organisation. A profit center is also responsible for the various expenses incurred by the organisation.

A profit center makes a manager more accountable, it greatly improves his/her decision making capabilities. The manager is incharge of the amount of revenue generated.