Before discontinuing a product based on costs, one should primarily consider the effects upon:
Before discontinuing a product based on costs, one should primarily consider the effects upon:
Before discontinuing a product based on costs, one should primarily consider the effects upon overhead absorption rates across product lines. When a product is discontinued, the fixed overhead costs previously allocated to that product need to be redistributed among the remaining products. This redistribution can significantly impact the cost structure of the remaining product lines, potentially raising their costs and affecting overall profitability.
the cost of other products in the portfolio
Overhead absorption rates across product lines: This is the correct answer. When a product is discontinued, overhead absorption will be redistributed among the remaining product lines, which may increase the costs of those products.
Is it C ?