Frank's Fitness evaluates the profitability of three segments: memberships, personal training, and classes. The financials are:SegmentRevenueDirect...
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Accounting
Frank's Fitness evaluates the profitability of three segments: memberships, personal training, and classes. The financials are:
Segment
Revenue
Direct Costs
Memberships
$500,000
$300,000
Personal Training
$200,000
$120,000
Classes
$80,000
$50,000
Frank is considering converting the classes area into an expanded personal training area.
Required: a. Calculate the necessary increase in the personal training segment margin to maintain Frank’s Fitness’ current income. b. Identify other considerations Frank should evaluate before deciding to eliminate the classes area to expand personal training.
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