In the Decision on Whether or Not to Drop an Unprofitable

question 26

Multiple Choice

In the decision on whether or not to drop an unprofitable product line, the product line will most likely be dropped if:

• A) all of the product line's fixed costs are unavoidable.
• B) the product line's total fixed costs are less than the contribution margin lost from dropping the product line.
• C) the contribution margin lost from dropping the product line is less than the fixed costs avoided from dropping the product line.
• D) the contribution margin lost from dropping the product line is more than the fixed costs avoided from dropping the product line.

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Definitions:

Shopping Trip

An outing specifically oriented towards purchasing goods or services.

Salesperson

A salesperson is an individual who sells products or services, aiming to meet customer needs and achieve sales targets.

Transaction Manager

A professional or system responsible for overseeing and ensuring the smooth processing of transactions, often in a financial, real estate, or e-commerce context.

Exchange Coordinator

An individual responsible for managing the logistics and operations of exchanging goods or services between two or more parties.