Decision for Add or Drop Product or Division. Cost Accounting Course. CPA Exam BAR. CMA Exam

An add or drop decision is based only on the relevant costs involved in the process. A decision whether or not to continue an old product line or department, or to start a new one is called an add-or-drop decision. An add-or-drop decision must be based only on relevant information. Relevant information includes the revenues and costs which are directly related to a product line or department
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As we have discussed earlier, some costs are not relevant to a decision, so as we look at options between our product lines, we need to decide which costs should be considered as decisions are made.

[@saram8157]

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[@AccountingLectures]

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