Sears Can Calculate the Profits It Generates from Appliances,home Furnishings,and

question 179

Multiple Choice

Sears can calculate the profits it generates from appliances,home furnishings,and every other department in the store if it treats each department as a ________.

• A) profit center
• B) cost center
• C) economic unit
• D) centralized unit

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Definitions:

Unit Variable Costs

The costs that vary directly with the level of production or sales volume, such as materials and labor, calculated on a per-unit basis.

Break-even Sales

The amount of revenue from sales needed to cover all of a company’s operating expenses, resulting in neither profit nor loss.

Unit Variable Costs

The costs that vary directly with the production volume, including materials and labor, on a per unit basis.

Break-even Point

The point at which total revenues equal total costs, resulting in no profit or loss.