John's Gym is analyzing the profitability of three segments: membership fees, personal training, and merchandise. The...
90.2K
Verified Solution
Link Copied!
Question
Accounting
John's Gym is analyzing the profitability of three segments: membership fees, personal training, and merchandise. The financial data are:
Segment
Revenue
Direct Costs
Membership Fees
$500,000
$300,000
Personal Training
$150,000
$90,000
Merchandise
$60,000
$40,000
John is considering converting the merchandise area into an expanded personal training area.
Required: a. Calculate the necessary increase in the personal training segment margin to maintain the current total income of John’s Gym. b. Discuss other factors John should consider before deciding to eliminate the merchandise segment to expand personal training.
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
