Asked by Christian DelaRosa on May 12, 2024
Verified
The elimination of an unprofitable product line may adversely affect the remaining product lines.
Unprofitable Product Line
A series of related products that do not generate expected profits, often identified through financial analysis for potential discontinuation.
- Gain insight into the consequences of removing an unprofitable product line from the company's total net income.
Verified Answer
SM
Samin MagarMay 19, 2024
Final Answer :
True
Explanation :
Eliminating an unprofitable product line may result in a decrease in overall revenue, which may then impact the profitability of the remaining product lines. This can happen if the unprofitable product was contributing to the overall revenue and/or was supporting the other product lines indirectly. However, in certain cases, eliminating an unprofitable product line may lead to a more streamlined and profitable operation.
Learning Objectives
- Gain insight into the consequences of removing an unprofitable product line from the company's total net income.
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