Discontinuing unprofitable products will ________.
A) increase profitability if the resources no longer required by the discontinued product can be eliminated
B) increase profitability if capacity constraints are adjusted
C) decrease profitability if the fixed costs does not change after discontinuing the particular business segment
D) increase profitability when a large portion of the fixed costs are unavoidable

Question

Quizplus · Accepted Answer

By discontinuing unprofitable products, the resources that were used for those products will no longer be required, leading to a reduction in costs. This reduction can increase profitability if the resources no longer required by the discontinued product can be eliminated.

Discontinuing Unprofitable Products Will ________