A profit center is responsible for generating revenue, but it is not responsible for controlling costs.

Profit Center

A business segment whose manager has control over cost and revenue but has no control over investments in operating assets.

Revenue

The complete sum of revenue a business earns from sales of goods or provision of services within a designated timeframe.

Controlling Costs

The process of monitoring, managing, and regulating expenses to operate within the budget and maximize profitability.

Recognize the differences between profit, cost, and investment centers in terms of responsibility and performance evaluation.

Verified Answer

Final Answer :

False

Explanation :

A profit center is responsible for generating revenue as well as controlling costs in order to maximize profits.

Learning Objectives

Recognize the differences between profit, cost, and investment centers in terms of responsibility and performance evaluation.