Discontinuing Unprofitable Products Will ________

question 196

Multiple Choice

Discontinuing unprofitable products will ________.

• A) increase profitability if the resources no longer required by the discontinued product can be eliminated
• B) increase profitability if capacity constraints are adjusted
• C) decrease profitability if the fixed costs does not change after discontinuing the particular business segment
• D) increase profitability when a large portion of the fixed costs are unavoidable

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Definitions:

Partnership Firm

A business entity in which two or more individuals share ownership, responsibilities, profits, and liabilities.

Partnership Agreement

A contract between partners in a business venture, specifying the terms of the partnership, roles, responsibilities, and profit-sharing.

Contract Elements

Essential components required for a contract to be legally binding, including offer, acceptance, consideration, and mutual intent.

Ongoing Business

A company or an enterprise that is actively engaged in continuous operations or activities.