When deciding whether to discontinue a segment of a business,managers should focus on:
A)equipment used by that segment that could become idle.
B)how total costs differ among alternatives.
C)operating profit per unit of the discontinued segment.
D)reallocation of corporate costs.

Question

Quizplus · Accepted Answer

When deciding whether to discontinue a segment of a business, managers should focus on how total costs differ among alternatives. This means considering the costs of continuing the segment versus the costs of discontinuing it, including any potential reallocation of corporate costs. Operating profit per unit of the discontinued segment and equipment becoming idle may be factors to consider, but the overall impact on total costs should be the main focus.

When Deciding Whether to Discontinue a Segment of a Business,managers