Eva's Events evaluates the profitability of three segments: weddings, corporate events, and private parties. The financial...
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Accounting
Eva's Events evaluates the profitability of three segments: weddings, corporate events, and private parties. The financial details are:
Segment | Revenue | Direct Costs |
Weddings | $400,000 | $250,000 |
Corporate Events | $150,000 | $90,000 |
Private Parties | $80,000 | $50,000 |
Eva is contemplating converting the private party space into an expanded area for corporate events.
Required: a. Calculate the required increase in the corporate events segment margin to maintain Eva's Events' current income. b. Identify other considerations Eva should evaluate before deciding to eliminate the private parties area to expand corporate events.
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