All of the Following Are Examples of Spending on Factors

question 178

Multiple Choice

All of the following are examples of spending on factors of production in the circular flow model except

• A)Bima hires two students to work at his ice-cream store.
• B)"Get Fit Together" purchases 3 new treadmills for its gym.
• C)Iris buys a dozen roses for her mother's birthday.
• D)The Banyan Tree rents a much larger property so that it can add a restaurant to its facilities.

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Definitions:

Profit Center

A profit center is a branch or division of a company that is directly responsible for generating its own revenue and profit.

Cost Center

A business unit that does not directly add to profit but still incurs costs, such as a human resources department.

Cost Center

A part of an organization that does not directly add to profit but incurs costs, such as the customer service department.

Profit Center

A branch or division of a company that is treated as a separate entity for the purpose of revenue and profit calculation, allowing for better management and financial analysis.