Question

Profit centers are often called

Answer 1

• Profit center is a department of an entity, which recognizes profit.

• Profit centres has control over costs and revenue, but not over the use of investment funds.

• Profit center managers are often evaluated by comparing actual profit to targeted or budgeted profit.

• Profit center is that segment of activity of a business which is responsible for both revenue and expenses.

Conculsion :- A profit center is a sub unit of a company that is responsible for revenues and costs. Often a division of a company is a profit center because it has control over its revenues, costs, and the resulting profits.