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In Profit Center Accounting Costs and Revenue are matched to find the profitability of the
Investment Center. The shared services expenses are allocated equitably in between the profit
centers to find our the accurate ROI of the Investment Centers. Here you will get the Segmental
Profit and loss account.
Whereas in the case of COPA, we get Product profitability upto Net income before Corporate
tax. The Cost of Sales is matched with the revenue to get the gross margin per each product as
well as marketing segment. Then selling overhead and Corporate expenses are allocated to the
products on the basis of revenue and we get EBITDA(Earnings before Interest, Debenture
interest and tax. The Longterm Interest and debenture interest shall also be allocated to the
products equitably. Consequently, it is able to know the profitability of the products before
payment of tax.