Kristina Food Pty Ltd operates a food business with two divisions; there is a restaurant a service. A segmented profit and loss statement for the company's most recent year is as follows:

	Total company	Restaurant	Catering
sales	$500,000	$375,000	$125,000
Less: variable expenses	$275,000	$187,500	$87,500
Contribution margin	$225,000	$187,500	$37,500
Less: traceable fixed cost	$145,000	$45,000	$100,000
Division segment margin	$80,000	$142,500	-$62,500
Less common fixed cost	$130,000
Net profit	-$50,000

Required

a) If the restaurant division increased its sales by $65,000, calculate the division segment margin the Restaurant division, and net profit for the total company. Assume that all fixed costs and cost behaviour patterns remained constant.

b) Calculate the contribution margin ratio and division segment margin ratio for the Restaurant division before and after the change in sales. Explain the changes. (3 marks) Based upon the segment information above, what could Kristina do to return her business to profitability?