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Dropping a Product Line or a Business Segment That Is

Question 37

Multiple Choice

Dropping a product line or a business segment that is experiencing a loss will cause the overall profitability of the company


A) to always increase.
B) to always decrease.
C) to either increase or decrease depending on the fixed costs that can be avoided compared to the contribution margin lost.
D) to either increase or decrease depending on the sales and variable costs that can be avoided compared to the contribution margin of the remaining products/segments.

Correct Answer:

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