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Sam's Sports is analyzing the profitability of three segments: equipment, apparel, and training. The financials are:SegmentRevenueDirect...

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Accounting

Sam's Sports is analyzing the profitability of three segments: equipment, apparel, and training. The financials are:

Segment

Revenue

Direct Costs

Equipment

$500,000

$300,000

Apparel

$200,000

$120,000

Training

$80,000

$50,000

Sam is considering converting the training area into an expanded equipment area.

Required: a. Calculate the increase in the equipment segment margin needed to maintain Sam’s Sports’ current income. b. What other considerations should Sam take into account before deciding to eliminate the training area to expand equipment?

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