Which of the Following Is the Best Reason for Continuing

question 24

Multiple Choice

Which of the following is the best reason for continuing to carry a product when a sales-volume analysis indicates it is a low-volume item?

• A)The primary demand for the product is declining.
• B)The product accounts for 5 percent of the total sales;however,its profit contribution is negative.
• C)The item is needed to round out the company's product line.
• D)The product's gross margin is correspondingly low.
• E)None of these.

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Definitions:

Noncorporate Business Organization

Any form of business entity that is not incorporated, such as partnerships, sole proprietorships, and limited liability companies, where the legal and tax characteristics may differ from those of corporations.

Separate Taxable Entity

An entity that is recognized as separate from its owners for tax purposes, such as a corporation, and therefore must file its own tax returns.

Ownership Interest

A portion or share in the ownership of assets, such as real estate or a company, affording the holder certain rights like income or control.

General Partners

Individuals or entities that participate in the management of a partnership and have unlimited personal liability for the debts and obligations of the partnership.