Definitions

Profit center

Profit center

Profit Centers are parts of a Corporation that directly add to its Profit.

Managers are held accountable for both revenues, and costs (expenses), and therefore, profits.

Usually the different profit centers are separated for Accounting purposes so that the management can follow how much profit each center makes and compare their relative efficiency and profit. Examples of typical profit centers are a store, a sales organization and a consulting organization. Profit centers can measure profitability of business units or departments.

A business unit or department which is treated as a distinct entity enabling revenues and expenses to be determined so that profitability can be measured.

See also: Cost center

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