George's Grill evaluates the profitability of three segments: restaurant, bar, and billiards. The financials are:SegmentRevenueDirect CostsRestaurant$320,000$200,000Bar$150,000$60,000Billiards$40,000$25,000George...
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Accounting
George's Grill evaluates the profitability of three segments: restaurant, bar, and billiards. The financials are:
Segment
Revenue
Direct Costs
Restaurant
$320,000
$200,000
Bar
$150,000
$60,000
Billiards
$40,000
$25,000
George is considering converting the billiards area into an expanded bar area.
Required: a. Based on segment margin analysis, by how much will the bar segment margin have to increase for the grill’s income to be at least as high as it is now? b. What other considerations will George want to consider before making the decision to eliminate billiards to expand the bar area?
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