A company should generally add a product line if:

Question

Quizplus · Accepted Answer

A company should generally add a product line only if its segment margin is positive, indicating that the product is generating enough profits to cover its direct costs and contribute to overall company profits. Adding a product line with a negative segment margin would only result in a loss for the company unless it can be optimized to increase its profitability. Therefore, options A and B are incorrect. Option D is also incorrect as there is a clear criteria given for when a company should add a product line.

A Company Should Generally Add a Product Line If