Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Frank's Fitness evaluates the profitability of three segments: memberships, personal training, and classes. The financials are: Segment Revenue Direct Costs Memberships $500,000 $300,000 Personal Training

Frank's Fitness evaluates the profitability of three segments: memberships, personal training, and classes. The financials are:

Segment

Revenue

Direct Costs

Memberships

$500,000

$300,000

Personal Training

$200,000

$120,000

Classes

$80,000

$50,000

Frank is considering converting the classes area into an expanded personal training area.

Required: a. Calculate the necessary increase in the personal training segment margin to maintain Frank’s Fitness’ current income. b. Identify other considerations Frank should evaluate before deciding to eliminate the classes area to expand personal training.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Entrepreneurship

Authors: Andrew Zacharakis, William D Bygrave

5th Edition

1119563097, 9781119563099

More Books

Students also viewed these Accounting questions