The Decision to Continue or Discontinue a Segment of the Business

question 27

Multiple Choice

The decision to continue or discontinue a segment of the business should focus on:

• A) sales minus total variable expenses and total fixed expenses.
• B) sales minus total variable expenses and avoidable fixed expenses of the segment.
• C) sales minus total variable expenses and allocated fixed expenses of the business.
• D) None of these.

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Definitions:

Cooperation

The process of groups or individuals working together towards a common goal, often leading to mutual benefit.

Self-Interest

The motivation driving individuals to pursue their own welfare, often guiding economic decisions and behaviors.

Dominant Strategy

A strategy that is best for a player in a game regardless of the strategies chosen by the other players.

Sherman Antitrust Act

A landmark 1890 U.S. legislation aimed at prohibiting monopolies and other practices that restrained competition and trade.