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Homework answers / question archive / Joe runs the Service Division for a car dealership
Joe runs the Service Division for a car dealership. The overall dealership has profits of $10 million on sales of $100 million and costs of $90 million. Joe s division contributed $9 million in sales and $7 million in costs. If the Service Division is evaluated as a profit center, what dollar amount is most relevant to Joe?
a. $2 million
b. $7 million
c. $9 million
d. $10 million
As service division is a profit center, here the relevant amount would be the profit of service division
=sales -costs
=$9 Million-$7 Million
=$2 Million
