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In 200 words or more, Huang Inc. has one product line that is unprofitable. What circumstances...

In 200 words or more, Huang Inc. has one product line that is unprofitable. What circumstances may cause overall company net income to be lower if the unprofitable product line is eliminated?

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Huang inc has one product that is unprofitable.

Circumstances may happen that the company have lower net income by elimination as the company should not eliminate the product if the Direct cost of the product greater than the selling price of the product.it means that if the elimination doesnot result in increase in net income of the company so the company should not go for elimination of the product directly.As there are many overhead cost involved which are fixed in nature and variable in nature.Fixed overheads are irrespective of the production so cancelling of one product will increase the cost of another products so this may cause lower net income if unprofitable product is eliminated

so the decision should be taken keeping all the factors in mind and all the elimination effects by cancelling the product

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