In the long run, the best profitability number for deciding the impact of discontinuing a segment is segment income after subtracting allocated common segment costs.

Question

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In the long run, if a segment is discontinued, all of its revenues, variable costs, and direct segment costs should be avoidable. In addition, allocated common segment costs should be able to be eliminated or used for the benefit of other segments.

In the Long Run, the Best Profitability Number for Deciding