A Profit Center

question 155

Multiple Choice

A profit center:

• A) Incurs costs, but does not directly generate revenues.
• B) Incurs costs and directly generates revenues.
• C) Has a manager who is evaluated solely on efficiency in controlling costs.
• D) Incurs only indirect costs and directly generates revenues.
• E) Incurs only indirect costs and generates revenues.

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Definitions:

Stock Options

Financial instruments granted to employees, giving them the right to buy the company's stock at a fixed price in the future.

Sales Commissions

Financial rewards given to sales personnel based on the volume or value of sales they have achieved, serving as an incentive.

Piece-Rate Pay

A compensation system where employees are paid based on the quantity of units they produce or complete.

Decision-Making Responsibility

The obligation to make choices that affect an organization's performance and to bear the consequences of those choices.