A segment of a business probably should be discontinued if
A) its common costs exceed its contribution margin.
B) its contribution margin exceeds its controllable fixed costs and its common costs.
C) it cannot produce a contribution margin.
D) it has a net loss.

Question

Quizplus · Accepted Answer

A segment should be discontinued if it cannot produce a contribution margin, as this indicates it is not covering its variable costs and is not contributing to fixed costs or profits.

A Segment of a Business Probably Should Be Discontinued If