All of the Following Are Relevant in Deciding Whether to Eliminate

question 107

Multiple Choice

All of the following are relevant in deciding whether to eliminate an unprofitable segment except the segment's

• A) sales.
• B) variable expenses.
• C) contribution margin.
• D) fixed expenses.

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Definitions:

Nails and Screws

Basic hardware items used in construction and carpentry to fasten materials together.

Direct Cost

Expenses directly attributable to the production of goods or services, such as raw materials and labor.

Indirect Cost

Costs not directly traceable to a product, department, or project, such as administration, rent, and utilities.

Manufacturing

The process of converting raw materials, components, or parts into finished goods that meet a customer's expectations or specifications.