Avoidable variable and fixed costs should be evaluated when deciding whether to discontinue a product,product line,business segment,or customer.

Question

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Evaluating avoidable variable and fixed costs is important in determining the profitability impact of discontinuing a product, product line, business segment, or customer. These costs can be avoided if the decision is made to discontinue the product, and therefore should be taken into account in the decision-making process.

Avoidable Variable and Fixed Costs Should Be Evaluated When Deciding