Harris Co.’s income statement for profit center No. 12 for August includes
Contribution margin $84,000
Manager’s salary 24,000
Depreciation on accommodations 9,600
Allocated corporate expenses 6,000
The profit center’s manager is most likely able to control which of the following?

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 or 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.