A Unit or Department That Incurs Costs but Does Not

question 37

Multiple Choice

A unit or department that incurs costs but does not generate revenues is known as a:

• A)cost center
• B)profit center
• C)revenue center
• D)None of these answers is correct.

---

Definitions:

Sports Bar

A bar or tavern that provides a venue for people to watch sporting events, often equipped with multiple large-screen televisions.

Normal Return

The minimum profit needed by investors to justify the capital invested in a business venture, often equated to the opportunity cost.

Total Revenue

Total Revenue is the total amount of money received by a firm from sales of goods or services before any expenses are deducted.

Economic Profit

The contrast between cumulative revenue and cumulative costs, taking into account both clear and veiled expenses.