When a Segment of a Company Is Showing a Net

question 83

True/False

When a segment of a company is showing a net loss, it is always best to discontinue the segment in order not to continue with losses.

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Definitions:

Operating Income

Income generated from a company's primary business operations, excluding revenue from investments and other non-operational sources.

Sales Mix

The combination of different products or services that a company sells, represented in terms of the proportion each contributes to total sales.

Product Portfolio

The collection of all products or services that a company offers to sell. The portfolio can include a range of products across different markets or product categories.

Contribution Margin Mix

The relative proportion of different products or services, contributing to the total contribution margin, highlighting how combination effects overall profitability.