Profit Center

question 22

Multiple Choice

Profit center

• A)A department or unit that incurs costs without directly generating revenues.
• B)A center in which a manager is responsible for using the center's assets to generate income for the center.
• C)Costs that are incurred for the joint benefit of more than one department and cannot be readily traced to only one department.
• D)Costs readily traced to a specific department because they are incurred for the sole benefit of that department.
• E)Costs incurred to produce two or more products at the same time.
• F)Costs that a manager can strongly influence or control.
• G)A department that incurs costs and generates revenues.
• H)Assigns managers the responsibility for costs and expenses under their control.

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Definitions:

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the asset's consumption or wear and tear.

Cash Budget

A detailed plan showing how cash resources will be acquired and used over a specific time period.

Disbursements

The act of paying out money from a fund or account, typically for expenses or investments.

Financing

The process of providing funds for business activities, making purchases, or investing, which can come through various means like loans, equity investments, or credits.