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A profit center is a section of a company treated as a separate business. Thus profits or losses for a profit center are calculated separately. A profit center manager is held accountable for both revenue and costs (expenses), and therefore for profits.
A responsibility center is an organizational unit headed by a manager, who is responsible for its activities and results. [1] In responsibility accounting, revenues and cost information are collected and reported on by responsibility centers.
A strategic business unit (SBU) in business strategic management, is a profit center which focuses on product offering and market segment. SBUs typically have a discrete marketing plan, analysis of competition, and marketing campaign, even though they may be part of a larger business entity.
A cost centre is a department within a business to which costs can be allocated. The term includes departments which do not produce directly but they incur costs to the business, [1] when the manager and employees of the cost centre are not accountable for the profitability and investment decisions of the business but they are responsible for some of its costs.
Revenue centers only measure the output (in fiscal standings) and are therefore marketing establishments which are exempt from profit generation and accountability thereof. [4] In a revenue center performance is measured by comparing actual sales to projected ones (as well as number of sales or revenue per time scale).
Generational Differences Paying off student loans Having enough money saved for retirement Having enough money saved to fund my children’s education
FTP can be understood as a mechanism for distributing revenue between profit centres, which can contribute to better financial performance evaluation of these business units. The split of these units between deposit-raising units and funds-advancing units affects whether they receive a positive or negative revenue adjustment.
Profit, in accounting, is an income distributed to the owner in a profitable market production process . Profit is a measure of profitability which is the owner's major interest in the income-formation process of market production.