Upstream costs are relevant for deciding whether to discontinue a product line.

Question

Quizplus · Accepted Answer

Upstream costs are costs incurred in the production process before the product reaches the customer. These costs include raw materials, labor, and equipment costs. These costs are important in determining the profitability of a product line and can influence the decision to discontinue the product if the costs outweigh the revenue generated by the product. Therefore, upstream costs are relevant for deciding whether to discontinue a product line.

Upstream Costs Are Relevant for Deciding Whether to Discontinue a Product