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Rachel's Restaurant analyzes profitability of three segments: breakfast, lunch, and dinner. The financials are:SegmentRevenueDirect CostsBreakfast$400,000$240,000Lunch$200,000$120,000Dinner$80,000$50,000Rachel is...

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Accounting

Rachel's Restaurant analyzes profitability of three segments: breakfast, lunch, and dinner. The financials are:

Segment

Revenue

Direct Costs

Breakfast

$400,000

$240,000

Lunch

$200,000

$120,000

Dinner

$80,000

$50,000

Rachel is considering converting the dinner area into an expanded lunch area.

Required: a. Calculate the necessary increase in the lunch segment margin to maintain Rachel’s Restaurant’s current income. b. Identify other considerations Rachel should evaluate before deciding to eliminate the dinner area to expand lunch.

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