A profit centre is a centre ____________.

A. Where the manager has the responsibility of generating and maximising profits

B. Which is concerned with earning an adequate Return on Investment

C. Both of the above

D. Which manages cost

Answer: Option A

Solution(By Examveda Team)

A profit centre is a centre where the manager has the responsibility of generating and maximising profits. In a profit centre, the manager has the responsibility and the authority to make decisions that affect both costs and revenues (and thus profits) for the department or division. The main purpose of a profit centre is to earn profit. Profit centre managers aim at both the production and marketing of a product.