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in this video were going to talk about how to decide whether to drop a product line or a particular segment of your business so one thing to keep in mind is if you do drop a product line two things are going to happen one thing is youre going to lose its contribution margin right so Ive got an example here where you have an auto manufacturer and they produce cars and trucks so they have two divisions two product lines cars and trucks and we have the contribution margin that we compute for each of those divisions and the cars the contribution margin is 90,000 the trucks is 60,000 so lets say that you dropped the trucks division you drop that product line youre going to lose the $60,000 in contribution margin right thats going to go away but youre also going to save something and youre going to save its avoidable fixed costs okay so you save the avoidable fixed cost of that division or that product line now why I say avoidable this is really crucial here because in some cases so
