All of the Following Are Considerations for Discontinuing a Product

question 27

Multiple Choice

All of the following are considerations for discontinuing a product or product line, except

• A)whether the product has a positive or negative contribution margin.
• B)not having any free capacity.
• C)if discontinuing the product or product line will affect sales of remaining products.
• D)determining if direct fixed costs could be avoided if the product or product line is discontinued.

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Definitions:

Stocks and Bonds

Financial instruments; stocks represent ownership shares in a company, while bonds are loan agreements between the bond issuer and an investor.

Comparable Units

Units or measures that are similar enough in key aspects to be used in comparisons or evaluations.

Certificates of Deposit

A savings certificate with a fixed maturity date and specified fixed interest rate that is issued by banks and is insured by the Federal Deposit Insurance Corporation (FDIC) up to a certain amount.