If the Cost Savings from Discontinuing a Product Exceed the Lost

question 154

True/False

If the cost savings from discontinuing a product exceed the lost revenues from discontinuing the product, it should be retained.

---

Definitions:

Direct Labor

The wages or expenses directly associated with the manufacturing of products or delivery of services.

Continuous Process

A production process that is non-stop and operates continuously over long periods.

Applied Factory Overhead

The portion of overhead costs that are allocated to produced goods based on a predetermined rate or method.

Direct Materials

Raw materials that can be directly attributed to the production of goods, considered a variable cost in manufacturing.