Answer (A) is correct . A profit center is a segment of a company responsible for both revenues and expenses. A profit center has the authority to make decisions concerning markets (revenues) and sources of supplies (costs). However, the profit center’s manager does not control his/her salary, investment and the resulting costs (e.g., depreciation of plant assets), or expenses incurred at the corporate level. Consequently, profit center No.?12 is most likely to control the $84,000 contribution margin (sales - variable costs) but not the other items in the summarized income statement.
Answer (B) is incorrect because The profit center manager does not control depreciation on accommodations ($9,600) or the allocated corporate expenses ($6,000).
Answer (C) is incorrect because The profit center manager does not control his/her $24,000 salary.
Answer (D) is incorrect because The profit center’s manager does not control the listed period expenses and therefore does not control the profit center’s income.
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The profit center’s manager is most likely able to control which of the following?
