Sophia's Salon analyzes profitability of three segments: haircuts, coloring, and spa treatments. Revenues and direct costs...
60.1K
Verified Solution
Link Copied!
Question
Accounting
Sophia's Salon analyzes profitability of three segments: haircuts, coloring, and spa treatments. Revenues and direct costs (variable plus fixed costs) for each segment are as follows:
Segment | Revenue | Direct Costs |
Haircuts | $450,000 | $250,000 |
Coloring | $200,000 | $120,000 |
Spa Treatments | $80,000 | $50,000 |
Sophia, the owner, is considering converting the spa area into an expanded hair coloring area.
Required: a. Based on segment margin analysis, by how much will the coloring segment margin have to increase for Sophia's Salon’s income to be at least as high as it is now? b. What other considerations will Sophia want to consider before making the decision to eliminate spa treatments to expand the coloring area?
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.