A department probably would be considered for elimination if it had:

Question

Quizplus · Accepted Answer

A department with a negative contribution margin is not generating enough revenue to cover its variable costs, resulting in a loss from operations. This makes it a likely candidate for elimination as it is not contributing to overall profitability. Departments with positive contribution margins may still be eliminated if their fixed costs are deemed too high and are negatively impacting the company's bottom line.

A Department Probably Would Be Considered for Elimination If It