Managers should discontinue a business if which of the following is less than the sum of relevant fixed costs and opportunity costs?
A) Profit
B) Variable cost
C) Total cost
D) Contribution margin

Question

Quizplus · Accepted Answer

The contribution margin should cover both the relevant fixed costs and the opportunity costs for a business to be viable. If the contribution margin is less than these combined costs, it indicates that the business is not covering its essential expenses and opportunity costs, suggesting discontinuation might be necessary.

Managers Should Discontinue a Business If Which of the Following