Which of the following is not relevant when deciding whether or not to discontinue a product line?

A. The product line's contribution margin.

B. The effect on the sales of other products if the product line is discontinued.

C. Fixed costs that can be avoided by discontinuing the line.

D. Fixed costs that cannot be avoided by discontinuing the line.

Question

Business

Lilia

2 July, 05:26

Which of the following is not relevant when deciding whether or not to discontinue a product line?

A. The product line's contribution margin.

B. The effect on the sales of other products if the product line is discontinued.

C. Fixed costs that can be avoided by discontinuing the line.

D. Fixed costs that cannot be avoided by discontinuing the line.

+4

Answers (1)

Know the Answer?

Edward Zavala · Answer 1

Fixed costs that can be avoided by discontinuing the line.

Explanation:

Avoidable costs are those costs which can be eliminated by closing or rejecting a decision under evaluation. These costs are mostly variable coasts which vary with the change in activities. More activity more cost, less activity less cost and no activity no cost.

So fixed costs that can be avoidable by discontinuing the project is the only irrelevant cost between the given options.