Question
Paul's Pub is analyzing profitability of three segments: dining, drinks, and events. The financials are: Segment Revenue Direct Costs Dining $450,000 $280,000 Drinks $220,000 $130,000
Paul's Pub is analyzing profitability of three segments: dining, drinks, and events. The financials are:
Segment | Revenue | Direct Costs |
Dining | $450,000 | $280,000 |
Drinks | $220,000 | $130,000 |
Events | $90,000 | $50,000 |
Paul is considering converting the events area into an expanded dining area.
Required: a. By how much must the dining segment margin increase to keep Paul’s Pub’s income unchanged? b. What other factors should Paul consider before deciding to eliminate the events area to expand dining?
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Using Financial Accounting Information The Alternative to Debits and Credits
Authors: Gary A. Porter, Curtis L. Norton
9th edition
978-1285183244, 128518324X, 978-1285779263, 1285779266, 978-1285183237
