Dropping a segment George's Grill analyzes profitability of three segments: restaurant, bar, and billiards. Revenues and direct costs (variable plus fixed costs) for each segment are as follows:

George, the owner, is considering converting the billiards area into an expanded bar area.
Required

a. Based on segment margin analysis (evaluating revenue minus direct costs for each segment) and ignoring remodeling costs, by how much will the bar segment margin have to increase for the grill's income to be at least as high as it is now?

b. What other considerations will George want to consider before making the decision to eliminate billards to expand the bar area?

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RESTAURANT BAR BILLIARDS Revenue $320,000 $150,000 $40,000 Direct costs 200,000 60,000 25,000