In deciding whether to drop or keep a product line, all the following are relevant to the decision except:
A) The level of unavoidable fixed costs.
B) The segment margin generated by the product line.
C) Demand interdependencies across product lines of the company.
D) Effect of the decision on overall company morale.
E) Whether dropping the product line today would eliminate future options for growth and expansion.

Question

Quizplus · Accepted Answer

The level of unavoidable fixed costs is irrelevant to the decision to drop or keep a product line because these costs will be incurred regardless of the decision.

In Deciding Whether to Drop or Keep a Product Line