Asked by Jeremy Dyzenhaus on Jul 05, 2024
Verified
The profit center income statement should include only controllable revenues and expenses.
Profit Center
A department or unit within a company responsible for generating profits, with its performance measured based on its ability to produce excess revenue over expenses.
Controllable Revenues
Revenues earned by the profit center.
Income Statement
A financial report detailing a business's income, outgoings, and net profit or loss for a certain timeframe.
- Familiarize oneself with the identification of controllable versus uncontrollable expenses in the arena of budget planning and performance review.
Verified Answer
SF
st fort SchilerJul 08, 2024
Final Answer :
True
Explanation :
The profit center income statement should only include revenues and expenses that the manager of the profit center can control. Such expenses are referred to as controllable directly by the profit center manager. This statement helps in evaluating the effectiveness of the manager in managing the revenue and expenses of the profit center.
Learning Objectives
- Familiarize oneself with the identification of controllable versus uncontrollable expenses in the arena of budget planning and performance review.