In the Decision on Whether or Not to Drop an Unprofitable

In the decision on whether or not to drop an unprofitable product line, the product line will most likely be dropped if:

A) all of the product line's fixed costs are unavoidable.
B) the product line's total fixed costs are less than the contribution margin lost from dropping the product line.
C) the contribution margin lost from dropping the product line is less than the fixed costs avoided from dropping the product line.
D) the contribution margin lost from dropping the product line is more than the fixed costs avoided from dropping the product line.

Correct Answer:

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