Profit Center Managers Are Evaluated on Their Ability to Generate

question 108

True/False

Profit center managers are evaluated on their ability to generate revenues in excess of costs.

---

Definitions:

Total Revenue

The overall amount of money generated by a business from its sales activities before any costs or expenses are deducted.

Marginal Revenue

The profit increase achieved by selling one additional unit of a product or service.

Marginal Cost

The incremental cost involved in producing an additional unit of a good or service.

Marginal Revenue

The financial gain a firm acquires from the sale of an extra unit of a product or service.