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Ella's Electronics evaluates the profitability of three segments: computers, phones, and accessories. The financials are:SegmentRevenueDirect CostsComputers$500,000$300,000Phones$200,000$120,000Accessories$80,000$50,000Ella...

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Accounting

Ella's Electronics evaluates the profitability of three segments: computers, phones, and accessories. The financials are:

Segment

Revenue

Direct Costs

Computers

$500,000

$300,000

Phones

$200,000

$120,000

Accessories

$80,000

$50,000

Ella is considering converting the accessories area into an expanded computers area.

Required: a. By how much must the computers segment margin increase to maintain Ella’s Electronics’ current income? b. Discuss other factors Ella should consider before deciding to eliminate the accessories area to expand computers.

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