A unit of an organization is referred to as a profit center if it has:

Multiple Choice

• Responsibility for combining material, labor, and other factors of production into a final output.

• Authority to provide specialized support to other units within the organization.

• Authority to make decisions affecting the major determinants of profit, including the power to choose its markets and sources of supply.

• Authority to make decisions affecting the major determinants of profit, including the power to choose its markets and sources of supply, and significant control over the amount of invested capital.

• Authority to make decisions over the most significant costs of operations, including the power to choose the sources of supply.