Assuming there are no other significant considerations,a product line with a negative contribution margin should be dropped.

Question

Quizplus · Accepted Answer

A negative contribution margin means that the product is not covering its variable costs and is actually losing money for the company. Therefore, dropping the product would make financial sense as it would lead to a decrease in overall losses and allow the company to focus on products that are profitable.

Assuming There Are No Other Significant Considerations,a Product Line with a Negative