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A Company Should

Question 57

Multiple Choice

A company should


A) eliminate any segment in which the contribution margin is less than the fixed costs that are unavoidable.
B) eliminate an unprofitable product line as it will always increase the total profits of a company.
C) eliminate an unprofitable product as fixed expenses allocated to the eliminated segment will likely be eliminated.
D) identify the relevant costs in deciding whether to eliminate an unprofitable segment.

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