ECONOMICS

Detailed explanation-1: -In an organisation, different profit centres are managed by managers who identify profits on the basis of costs and revenues. The profit centre is accountable for all the actions associated with the sale of goods and production.

Detailed explanation-2: -Comparing Cost Centers and Profit Centers The main difference between the two is that a cost center is only responsible for its costs, while a profit center is responsible for both its revenues and costs.

Detailed explanation-3: -Profit Center: A unit of an organization that generates both revenue and expenses. Its goal is to have revenue exceed expenses. Cost Center: A unit of an organization that generates expenses and has no responsibility for generating revenue. Its goal is to adhere to expense budgets.

Detailed explanation-4: -The manager for a cost center is only responsible for keeping costs in line with the budget and does not bear any responsibility regarding revenue or investment decisions. Cost centers can not simply be eliminated; their role within a company is vital, even if it does not generate any income for the business.

Detailed explanation-5: -In a profit center, the manager is responsible for the revenues generated by the subunit. In addition, they are responsible for the costs and expenses incurred by the subunit in the course of normal business operations. As a result, the manager of a profit center is responsible for the profits of the subunit.