Asked by Kesha Boston on Jun 26, 2024
Verified
Managers will always seek to eliminate all unprofitable product lines.
Unprofitable Product Lines
Product categories or items that do not generate a profit and may result in a financial loss for the company.
- Understand the impact of cost allocations on product and business unit profitability.
Verified Answer
SB
SubAqurius BarttJun 29, 2024
Final Answer :
False
Explanation :
Managers may not always eliminate unprofitable product lines as they may have strategic reasons to keep them, such as to maintain diversification or to compete with rivals. However, they will generally seek to improve the profitability of these product lines or restructure them to make them viable.
Learning Objectives
- Understand the impact of cost allocations on product and business unit profitability.
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