Marshalls Grocery Store has a small bakery that sells coffee and baked goods at very low prices.

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Marshall’s Grocery Store has a small bakery that sells coffee and baked goods at very low prices. (For example, coffee and one doughnut cost 25 cents.) The basic purpose of the bakery is to attract customers to the store and to make the store “smell like a bakery.” In each period, costs traceable to the bakery exceed revenue. Would you evaluate the bakery as a cost center or as a profit center? Explain.

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