In a decision to eliminate a segment,remaining segments must have sufficient contribution margin to cover their own direct costs and the common costs.

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This statement is true. When eliminating a segment, the remaining segments must generate enough contribution margin to cover their own direct costs and the common costs in order to maintain profitability. If the remaining segments cannot cover these costs, the overall profitability of the company will suffer.

In a Decision to Eliminate a Segment,remaining Segments Must Have