Direct operating margin may be used as a basis for eliminating a department.

Question

Quizplus · Accepted Answer

Direct operating margin is a measure of profitability that takes into account only the expenses that are directly related to the production or sale of a product or service. It may be used as a basis for eliminating a department if it is found to be consistently unprofitable or if its costs cannot be justified in relation to the revenue it generates.

Direct Operating Margin May Be Used as a Basis for Eliminating