In a Decision as to Whether or Not to Drop

question 140

True/False

In a decision as to whether or not to drop a product, fixed costs that have been allocated to that product are generally not relevant unless there is a savings of fixed costs as a result of dropping the product.

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Definitions:

Materially Altered

Refers to significant modifications made to a document or object that change its original condition or purpose.

Presentment Warranties

are assurances given by a party during the presentation of a negotiable instrument that certain facts are true.

Drawer

A drawer is the party that issues or writes a check or draft instructing the drawee, such as a bank, to pay a specified sum of money to a third party, the payee.

Breach of a Warranty

The failure to fulfill the terms of a promise or guarantee given regarding the quality or duration of a product or service.