Profit Center

Topics: Income statement, Decision theory, Cost Pages: 3 (361 words) Published: June 9, 2008
profit center

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.

Distinctly identifiable department or unit that contributes to the overall financial results of a firm. Where adequate cost accounting systems are in place, profit centers are given responsibility to target certain percentages of the total revenue and are given adequate authority to control their costs to achieve those targets. See also cost center and revenue center. business


A commercial activity engaged in as a means of livelihood or profit, or an entity which engages in such activities.


The positive gain from an investment or business operation after subtracting for all expenses. opposite of loss.


A business, unit or function within a company.


Any cost of doing business resulting from revenue-generating activities.

Definition 1

A reduction in the value of an investment.

Definition 2

A condition in which a company's expenses exceed its revenues. opposite of profit.

cost center
Definition 1
Defined geographical area, machine, or person to whom direct and indirect costs are allocated. Definition 2
Distinctly identifiable department, division, or unit of firm whose managers are responsible for its all associated costs and for ensuring adherence to its cost-budgets. Also called cost pool. See also profit center and revenue center. decision

Choice made between alternative courses of action in a situation of uncertainty. Although too much uncertainty is undesirable, manageable uncertainty provides the freedom to make creative decisions. delegative leadership

Leadership style in which a leader transfers decision making power to one or more employees, but remains responsible for their decisions....
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