From a Quantitative Standpoint a Segment Should Be Eliminated If

question 171

True/False

From a quantitative standpoint a segment should be eliminated if its contribution margin is less than the fixed costs that can be eliminated.

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Definitions:

Revenue Activity

Activities undertaken by a business that result in the earning of income, typically from the sale of goods or provision of services.

Cash Investments

Financial assets such as stocks, bonds, or real estate purchased with the expectation of generating a return on investment.

Statement of Cash Flows

A financial statement detailing the impact of alterations in balance sheet accounts and income on cash and cash equivalents, segmented into operating, investing, and financing activities.

Stockholders

Individuals or entities that own one or more shares of stock in a corporation, making them owners of a portion of the company.