A product line should be temporarily discontinued if
A)it is operating at a loss.
B)it is failing to produce the desired profit.
C)the relevant costs saved exceed the relevant revenue lost
D)dropping the product line will adversely affect remaining workers.

Question

Quizplus · Accepted Answer

When the relevant costs saved by discontinuing a product line exceed the relevant revenue lost, it makes sense to temporarily discontinue the product line. This is because the company will save money in terms of costs incurred in producing and marketing the product line, while the revenue lost can be offset by sales from other product lines. In the long run, the company can re-evaluate the decision to discontinue the product line and re-introduce it if the market conditions change. The other options (A, B, and D) are not necessarily valid reasons for temporarily discontinuing a product line as they do not take into account the long-term impact on the company's profitability and competitiveness.

A Product Line Should Be Temporarily Discontinued If