Question

A profit center is evaluated by the rate of return earned on the investment allocated to the center. referred to as a loss center when operations do not meet the company’s objectives. a responsibility center that always reports a profit. a responsibility center that incurs costs and generates revenues.

Answer 1

Answer:

a responsibility center that incurs costs and generates revenues.

Explanation:

We know that

The profit = Sales revenue - cost

After selling the product and incurred expenses, the amount which is left is shown as a profit. The remaining amount is termed as a profit that a firm has earned during a particular year.

It is the responsibility center at which we know about the total cost incurred and total revenues earned so that it becomes easy to compute how much the firm has earned the profit in a year.