The general rule is to keep any product or service in the short term:
A) That can be sold
B) That covers variable costs
C) That covers variable costs plus any fixed costs that can be avoided if the product or service is dropped
D) If it covers part of the avoidable costs

Question

Quizplus · Accepted Answer

Keeping a product or service in the short term should cover the variable costs and any fixed costs that can be avoided if the product or service is dropped. This is because dropping the product would free up those fixed costs, which would otherwise continue to incur even if the product is not generating revenue. Therefore, covering these costs is crucial to ensure profitability in the short term.

The General Rule Is to Keep Any Product or Service