Which of the Following Statements Describes a Scenario When Management

question 147

Multiple Choice

Which of the following statements describes a scenario when management should consider dropping a business division?

• A) The division has consistently reported an operating loss.
• B) The division's avoidable fixed costs are less than its contribution margin.
• C) The division's avoidable fixed costs are greater than its contribution margin.
• D) The division's unavoidable fixed costs are greater than its operating loss.

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Definitions:

Critical Thinking

A thorough investigation and evaluation of a case for the purpose of making an evaluation.

Stubborn

Showing dogged determination not to change one's attitude or position on something, especially in spite of good arguments or reasons to do so.

Judgmental

Characterized by or involving the use or expression of judgment, especially critical or negative judgment.

Rubric

A guide consisting of specific criteria used for assessment or grading.