Question
Georges Grill analyzes profitability of three operating units: restaurant, bar, and billiards room. Revenues, variable costs, and attributable fixed costs (which can be avoided if
Georges Grill analyzes profitability of three operating units: restaurant, bar, and billiards room. Revenues, variable costs, and attributable fixed costs (which can be avoided if the unit is eliminated) for each unit are as follows:
Restaurant | Bar | Billiards Room | |
---|---|---|---|
Revenue | $320,000 | $150,000 | $40,000 |
Variable costs | 120,000 | 35,000 | 10,000 |
Attributable fixed costs | 80,000 | 25,000 | 15,000 |
Required George, the owner, is considering converting the billiards area into an expanded bar area. Ignoring remodeling costs, by how much will the bar segment margin have to increase for the income at Georges Grill to be at least as high as it is now? Think about other considerations that George will want to consider before making the decision to eliminate the billiards unit to expand the bar area.
The bars segment margin would have to increase by at least $_______
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