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Profit Centers

Investopedia, LLC (2016, para. 1) defines a profit center as

a branch or division of a company that is accounted for on a standalone basis for the purposes of profit calculation. A profit center is responsible for generating its own results and earnings, and as such, its managers generally have decision-making authority related to product pricing and operating expenses. Profit centers are crucial in determining which units are the most and least profitable within an organization.

Examples of profit center managers include

• bank branch managers,
• division or segment managers, and
• managers of company-owned fast-food restaurants.

You would prepare a flexible budget for the branch office, division, or segment of the company, including the revenue and all expenses incurred, as well as a calculation for operating income.