Maggie's Market evaluates the profitability of three segments: produce, dairy, and bakery. The financials are:SegmentRevenueDirect CostsProduce$400,000$240,000Dairy$150,000$90,000Bakery$70,000$40,000Maggie...
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Accounting
Maggie's Market evaluates the profitability of three segments: produce, dairy, and bakery. The financials are:
Segment | Revenue | Direct Costs |
Produce | $400,000 | $240,000 |
Dairy | $150,000 | $90,000 |
Bakery | $70,000 | $40,000 |
Maggie is contemplating turning the bakery space into an expanded dairy section.
Required: a. Determine how much the dairy segment margin needs to increase to ensure Maggie’s Market’s income remains unchanged. b. Identify other considerations Maggie should evaluate before deciding to eliminate the bakery to expand the dairy section.
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