When a Segment of a Business Consistently Shows Net Losses

question 94

Multiple Choice

When a segment of a business consistently shows net losses, it should:

• A) Definitely be dropped
• B) Be dropped only if its contribution to overall company profits is negative
• C) Be dropped only if contribution margin exceeds fixed costs
• D) Never be dropped

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Definitions:

Sales Quotas

Target sales figures assigned to sales teams or individuals to achieve within a specific time period.

Departmentalization

The organizational practice of dividing a business into separate departments, each handling specific tasks or functions.

Product

Bundle of physical, service, and symbolic attributes designed to satisfy buyers’ wants.

Organizational Structure

Organizational structure defines how tasks are divided, coordinated, and supervised within an organization, influencing the organization’s culture and mode of operation.