Question

A profit center is___________.

Answer 1

Answer:

The correct answer is option b. a responsibility center that incurs costs and generates revenues.

Explanation:

A profit center is a division located within a company and responsible for generating profits in it. It uses everything a company has to generate some kind of profit with it.

This type of center, although it is in the company, it could be said that it is foreign to it, since its profits and losses are not taken into account for the accounting balance of the company.

Their task is to determine what is more and less profitable in an organization and they are responsible for developing activities that produce income.

They must be in charge of putting a price on the products taking into account that they must exceed the production costs.