Linda's Luxuries is assessing the profitability of three segments: jewelry, watches, and handbags. The financials are:

Segment	Revenue	Direct Costs
Jewelry	$600,000	$360,000
Watches	$150,000	$90,000
Handbags	$70,000	$40,000

Linda is considering converting the handbags area into an expanded jewelry area.

Required: a. Calculate the necessary increase in the jewelry segment margin to maintain Linda’s Luxuries’ current income. b. Identify other considerations Linda should evaluate before deciding to eliminate the handbags area to expand jewelry.