Management Will Most Likely Behave the Same Way If a Department

question 12

True/False

Management will most likely behave the same way if a department is structured as a cost center or if the same department is structured as a profit center.

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Definitions:

Retained Earnings

The residual net income available to a business after distributing dividends to its shareholders.

Net Income

Net income is the total profit of a company after all expenses, taxes, and costs have been subtracted from total revenues.

Dividends

Payments made by a corporation to its shareholders, usually as a distribution of profits.

Gross Profit Percentage

A financial ratio that expresses the gross profit as a percentage of sales revenue, indicating the efficiency of production and cost management.