When Deciding Whether to Discontinue a Segment of a Business

question 112

Multiple Choice

When deciding whether to discontinue a segment of a business, relevant costs include ________.

• A) auditing expenses for the whole company
• B) fees paid to a management consultant to study the feasibility of the business segment
• C) annual insurance costs of the company
• D) future administrative costs that can be eliminated

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Definitions:

United States

A federal republic consisting of 50 states, a federal district, and various territories, located primarily in North America.

Deadweight Losses

Losses in social surplus that occur when a market is not operating efficiently, often due to disruptions like taxes, subsidies, or monopolies.

Government Size

A measure of how large or expansive a government is, often in terms of spending, taxation, and regulation.

Protective Functions

Measures implemented to safeguard consumers, employees, and businesses against harm or exploitation.