Nina's Nails evaluates the profitability of three segments: manicures, pedicures, and nail art. The financials are:SegmentRevenueDirect...
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Accounting
Nina's Nails evaluates the profitability of three segments: manicures, pedicures, and nail art. The financials are:
Segment | Revenue | Direct Costs |
Manicures | $400,000 | $240,000 |
Pedicures | $200,000 | $120,000 |
Nail Art | $80,000 | $50,000 |
Nina is considering converting the nail art area into an expanded pedicures area.
Required: a. By how much must the pedicures segment margin increase to maintain Nina’s Nails’ current income? b. Discuss other factors Nina should consider before deciding to eliminate the nail art area to expand pedicures.
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