Question

How do you identify the difference between a cost center, a profit center, and an investment center?

How do you prepare a segment margin income statement and evaluate a segment’s financial performance?

Answer 1

Answer:

1.A cost focus is an office in which no pay is created remotely however acquired expenses and it produces benefits (Indirectly).

A benefit focus is an office whose primary protest is to deliver benefit. It caused costs and creates income however last expected result is by and large benefit.

A speculation fixate center around degree of profitability. In this office the venture choices are made.

2. To get ready fragment pay proclamation deduct variable costs from deals results in commitment edge for section portion edge is acquired by derivation portions assessable settled expenses from sections commitment edge.

Consequently, speaks to net edge after all expenses are secured.

It is best strategy in long kept running as productivity of section is resolved precisely as it incorporates costs caused by that portion as it were. Consequently it is exceptionally valuable for basic leadership.