Question

a segment should probably be dropped when the segment blank . multiple select question. has a positive segment margin but cannot cover any common fixed costs has important side effects on other segments cannot cover its own costs has a contribution margin that cannot cover traceable fixed costs

Answer 1

A segment should probably be dropped when the segment has important side effects on other segments cannot cover its own costs. The correct option is B.

What is a segment margin?

The profit or loss generated by one component of a business is referred to as segment margin.

Segment margin only considers the segment's revenue and expenses.

By analyzing a company's strengths and weaknesses, segment margin can provide an accurate picture of where it is performing well and where it is not.

If a segment cannot cover its own costs, it should be dropped unless it has significant side effects on other segments.

Thus, the correct option is B.

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