Discontinuing an unprofitable customer ________.
A) will eliminate all corporate costs assigned to and may result in losing more revenues relative to costs saved
B) will eliminate all costs assigned to and may result in gaining more revenues relative to costs saved
C) will not eliminate all costs assigned to and may result in losing more revenues relative to costs saved
D) will not eliminate all corporate costs assigned to and may result in gaining more revenues relative to costs saved

Question

Quizplus · Accepted Answer

Discontinuing an unprofitable customer may not necessarily eliminate all costs assigned to them. Additionally, there is a risk of losing more revenues relative to costs saved if the customer was generating some revenue, even if it was not profitable. Therefore, option C is the best choice.

Discontinuing an Unprofitable Customer ________