Which of the following statements is/are correct? I. A profit center has control over both costs...
Which of the following statements is/are correct?
I. A profit center has control over both costs and revenues.
II. An investment center has control over invested funds, but
not over costs and revenues.
III. A cost center has no control over sales.
Multiple Choice
-
Only I and II.
-
Only II.
-
Only I and III.
-
Only I.
Homework Answers
Ans : Option C, only I and III are true
Profit center is a center where costs and revenue can be assignable. therefore profit center has control over costs and revenue
Cost center is a center where costs are assignable, since costs are only assigned there will be no control over sales.
Investment center is similar to profit center, so investment center has control over sales and costs. so option II is incorrect.
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