Question
Laura's Library is assessing the profitability of three segments: books, cafe, and events. The financials are: Segment Revenue Direct Costs Books $600,000 $360,000 Cafe $150,000
Laura's Library is assessing the profitability of three segments: books, cafe, and events. The financials are:
Segment | Revenue | Direct Costs |
Books | $600,000 | $360,000 |
Cafe | $150,000 | $90,000 |
Events | $70,000 | $40,000 |
Laura is considering converting the events area into an expanded books area.
Required: a. Calculate the necessary increase in the books segment margin to maintain Laura’s Library’s current income. b. Identify other considerations Laura should evaluate before deciding to eliminate the events area to expand books.
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Financial Reporting And Analysis
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
8th Edition
1260247848, 978-1260247848
