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Sophia's Spa evaluates the profitability of three segments: massages, facials, and nail services. The financials are:SegmentRevenueDirect...

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Accounting

Sophia's Spa evaluates the profitability of three segments: massages, facials, and nail services. The financials are:

Segment

Revenue

Direct Costs

Massages

$500,000

$300,000

Facials

$200,000

$120,000

Nail Services

$80,000

$50,000

Sophia is considering converting the nail services area into an expanded massages area.

Required: a. Calculate the necessary increase in the massages segment margin to maintain Sophia’s Spa’s current income. b. Identify other considerations Sophia should evaluate before deciding to eliminate the nail services area to expand massages.

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