Question

Colleen Stevens is the North Carolina senior account manager for a national medical equipment manufacturer. Colleen has overall responsibility for the Southeast sales division. The division employs approximately eight sales representatives. Colleen’s representatives sell equipment, but equipment maintenance is provided by the maintenance division, which is coordinated through the national headquarters.

Colleen is most likely in charge of which type of strategic business unit (SBU)?
Cost Center?
Revenue Center?
Profit Center?
Investment Center?

Answer 1

Solution

Answer – Correct option is Revenue Center

Explanation:

A sales center is the most known example of revenue center.

Colleen is mostly likely in charge of Revenue Center, as the division is responsible for sales of medical equipment in southeast region.

Revenue center are primarily focused on outputs, where performance is measured by comparing actual sales to estimated sales. Though revenue center has costs, the manager is primarily concerned with revenue generation. However, cost of sales representatives are of prime nature and are taken into account for performance measurement.

The manager is responsible for and holds control on issues relating to marketing but not on matters such as product mix.