Generally,a Product Line Should Be Dropped When the Fixed Costs

question 61

True/False

Generally,a product line should be dropped when the fixed costs that can be avoided by dropping the product line are less than the contribution margin that will be lost.

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Definitions:

Strategy

A plan of action designed to achieve a long-term or overall aim.

Total Cost Concept

An accounting approach that includes all costs - direct and indirect - associated with producing a good or service.

Government Agencies

Official organizations at the federal, state, or local level that administer and oversee specific functions or areas of public interest.

Product Pricing

The process of determining the financial value at which a product will be sold to consumers, balancing cost, demand, and profit objectives.