Eliminating a poorly performing product may actually result in lower overall total profit because of the adverse impact on common costs.

Question

Quizplus · Accepted Answer

Eliminating a poorly performing product can lead to lower overall total profit if the product was contributing to covering common fixed costs, which are not eliminated with the product. This can increase the cost burden on the remaining products, potentially reducing overall profitability.

Eliminating a Poorly Performing Product May Actually Result in Lower