Which of the following criteria should be used when making a decision about whether or not to drop a market segment?

Question

Quizplus · Accepted Answer

When considering dropping a market segment, the most important criteria to consider is the segment margin available to cover indirect fixed costs. This is because it is not enough to simply look at the total contribution margin of the segment or the net income of the segment, as these figures do not take into account the fixed costs that are necessary to maintain the segment. By looking at the segment margin available to cover indirect fixed costs, decision-makers can get a better sense of whether or not the segment is truly profitable and worth keeping.

Which of the Following Criteria Should Be Used When Making