COST ACCOUNTING
RESPONSIBILITY ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A large company
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A new car sales division for a large local auto agency
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The information technology Department of a large consumer products company
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The production operations department of a small job-order machine shop company.
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Detailed explanation-1: -Answer: D. A new car sales division for a large local auto agency. Profit Center is a Division within the entity that is responsible for revenues and expenses but is not used for as investment.
Detailed explanation-2: -An example of a profit center is the selling or sales department. This business segment uses company resources like rent, sales staff salaries, and utilities to generate revenues by selling products to customers. Management typically analyzes the performance of both the department as a whole and its manager.
Detailed explanation-3: -Types of profits center For example, the sales division is a profit center of every company. The sales division is a department, and at the same time, it is within the organization. A strategic unit of a big organization: Profit centers can also be sub-units or strategic units of a big organization.
Detailed explanation-4: -Which of the following is the best definition of a profit centre? A profit centre is a unit of the organisation in respect of which a manager is responsible for costs under his or her control.
Detailed explanation-5: -A profit center is a branch or division of a company that directly adds or is expected to add to the entire organization’s bottom line. It is treated as a separate, standalone business, responsible for generating its revenues and earnings.