When Deciding Whether to Discontinue a Segment of a Business

question 117

Multiple Choice

When deciding whether to discontinue a segment of a business, managers should focus on:

• A) The amount of operating income per unit produced by the segment.
• B) The amount of contribution margin per direct labor hour in the segment.
• C) How corporate-level administrative costs would be redistributed if the segment were eliminated.
• D) The cost of equipment from the segment that could go idle if the segment were discontinued.
• E) The total contribution margin generated by the segment relative to any traceable (avoidable) fixed costs associated with the segment.

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Definitions:

Obedience Levels

The degree to which individuals follow orders or directions from authorities.

Countries

Nation-states or sovereign territories defined by geographical boundaries, governments, and populations with shared cultural or political identities.

Authoritarian Personality

An authoritarian personality is characterized by strict adherence to rules, allegiance to authority, and often intolerance for weakness or difference.

Highly Obedient

Describes an individual or a behavior characterized by a high degree of compliance with orders or directives from authorities.