John's Gym is analyzing the profitability of three segments: membership fees, personal training, and merchandise. The financial data are:

Segment	Revenue	Direct Costs
Membership Fees	$500,000	$300,000
Personal Training	$150,000	$90,000
Merchandise	$60,000	$40,000

John is considering converting the merchandise area into an expanded personal training area.

Required: a. Calculate the necessary increase in the personal training segment margin to maintain the current total income of John’s Gym. b. Discuss other factors John should consider before deciding to eliminate the merchandise segment to expand personal training.