Chapter 24, Problem 7DQ

To determine

Introduction:

Cost center: A cost center is a part of a business that serves itself as a business unit. It has its own expenses. They are not responsible for generating revenue. The idea of identification of a cost centre is to have control and track of the expenses incurred. Cost centers are generally related to decentralization and responsibility accounting. Some of the examples of cost centers are accounting department, human resource department, service department.

To Analyze: Whether the cost center’s profitability can be evaluated