If a product line has a positive contribution margin, the product line should be dropped.

Name: If a product line has a positive contribution margin, the product line should be dropped.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

A positive contribution margin means that the product line is generating more revenue than its variable costs, and is contributing towards covering the fixed costs and ultimately towards profits. Therefore, dropping a product line with a positive contribution margin would lead to a decrease in profits.

If a Product Line Has a Positive Contribution Margin, the Product