Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Which of the following is false when conducting an incremental analysis of whether to drop an unprofitable segment? Revenue from the discontinued segment is not

image text in transcribed
Which of the following is false when conducting an incremental analysis of whether to drop an unprofitable segment? Revenue from the discontinued segment is not absorbed by the remaining segments. Managers not only need to look at changes in net income, they also need to consider any qualitative factors influencing the decision. O Managers must consider the amount of fixed costs that would remain after discontinuing a segment as these costs will be absorbed by other segments O If avoidable fixed costs are less than the lost contribution margin, they should eliminate the segment

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Process Safety Management Risk Management Planning Auditing Handbook A Checklist Approach

Authors: David Einolf, Luverna Menghini

1st Edition

086587686X, 978-0865876866

More Books

Students also viewed these Accounting questions