When deciding whether to discontinue a segment of a business, managers should focus on:

Multiple Choice

• The cost of equipment from the segment that could go idle if the segment were discontinued.

• The amount of operating income per unit produced by the segment.

• The amount of contribution margin per direct labor hour in the segment.

• How corporate-level administrative costs would be redistributed if the segment were eliminated.

• The total contribution margin generated by the segment relative to any traceable (avoidable) fixed costs associated with the segment.