Question

Managerial decision makers must often consider non-economic factors as well. For example, when considering whether to outsource to another country, in addition to considering the cost of that decision, managerial accountants with an emphasis on sustainability should consider the human capital impact as well. This represents sustainability within a:

Answer 1

This stands for sustainability when faced with a keep or drop decision.

A tactical business choice regarding whether to keep running a product, department, or specific company unit is called "keep or drop."

How do we decide whether to keep or drop a particular segment?

• The first step in selecting whether to preserve or eliminate a portion of the business is to construct a segmented income statement.
• Make a product line income statement, for instance, if a product is not lucrative.
• Make an income statement for any locations that are not producing a profit.

Which factor should be considered while selecting whether to keep or drop a product line?

• The entire costs, not only the per-unit prices, should be taken into consideration when considering whether or not to discontinue a product.
• Review the fixed expenses for production, sales, shipping and storage, customer service, and any other expenditures you can associate with the product.

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