A company should eliminate any segment in which the contribution margin is less than the fixed costs that are unavoidable.

Name: A company should eliminate any segment in which the contribution margin is less than the fixed costs that are unavoidable.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

A company should consider eliminating a segment if its contribution margin is less than the avoidable fixed costs, not unavoidable ones, as unavoidable costs will remain even if the segment is eliminated.

A Company Should Eliminate Any Segment in Which the Contribution