Anna's Art Gallery is assessing profitability of three segments: paintings, sculptures, and workshops. The financial figures...
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Accounting
Anna's Art Gallery is assessing profitability of three segments: paintings, sculptures, and workshops. The financial figures are:
Segment | Revenue | Direct Costs |
Paintings | $500,000 | $300,000 |
Sculptures | $200,000 | $120,000 |
Workshops | $100,000 | $60,000 |
Anna is considering converting the workshop space into an expanded sculpture display area.
Required: a. Determine the necessary increase in the sculpture segment margin to maintain Anna’s Art Gallery’s current income. b. Discuss other factors Anna should consider before deciding to eliminate the workshops to expand the sculpture display area.
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