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Rachel's Restaurant evaluates the profitability of three segments: dining, takeout, and catering. The financials are:SegmentRevenueDirect CostsDining$600,000$400,000Takeout$200,000$120,000Catering$80,000$50,000Rachel...

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Accounting

Rachel's Restaurant evaluates the profitability of three segments: dining, takeout, and catering. The financials are:

Segment

Revenue

Direct Costs

Dining

$600,000

$400,000

Takeout

$200,000

$120,000

Catering

$80,000

$50,000

Rachel is considering converting the catering area into an expanded takeout section.

Required: a. Calculate the required increase in the takeout segment margin to maintain Rachel’s Restaurant’s current income. b. Identify other considerations Rachel should take into account before deciding to eliminate the catering segment to expand takeout.

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