Question
Tim's Toy Store is analyzing the profitability of three segments: action figures, dolls, and board games. The financials are: Segment Revenue Direct Costs Action Figures
Tim's Toy Store is analyzing the profitability of three segments: action figures, dolls, and board games. The financials are:
Segment | Revenue | Direct Costs |
Action Figures | $400,000 | $240,000 |
Dolls | $150,000 | $90,000 |
Board Games | $60,000 | $40,000 |
Tim is considering converting the board games area into an expanded action figures area.
Required: a. Calculate the increase in the action figures segment margin needed to maintain Tim’s Toy Store’s current income. b. What other considerations should Tim take into account before deciding to eliminate the board games area to expand action figures?
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Cost Management Measuring Monitoring And Motivating Performance
Authors: Leslie G. Eldenburg, Susan Wolcott, Liang Hsuan Chen, Gail Cook
2nd Canadian Edition
1118168879, 9781118168875
