Richmond's is a retail store with eight departments, including a garden department that has been operating at a loss. The following condensed income statement gives the latest year's operating results:     Garden Department All Other Departments Sales $840,000 $6,000,000 Cost of sales 504,000 3,900,000 Gross profit 336,000 2,100,000 Direct expenses 270,000 682,500 Common expenses 120,000 780,000 Total expenses 390,000 1,462,500 Net income (Loss) $(54,000) $637,500 a. Calculate the gross profit percentage for the garden department and for the other departments as a group.   Garden department Answer%   All other departments Answer%   b. Suppose that if the garden department were discontinued, the space occupied could be rented to an outside firm for $45,000 per year, and the common expenses of the firm would be reduced by $11,200. What effect would this action have on Richmond's net income? (Ignore income tax in your calculations.)

An income statement for Sam's Bookstore for the first quarter of the year is presented below:   Sam's Bookstore Income Statement For Quarter Ended March 31 Sales     $ 840,000 Cost of goods sold       545,000 Gross margin       295,000 Selling and administrative expenses         Selling $ 116,000     Administration   136,000   252,000 Net operating income     $ 43,000     On average, a book sells for $60. Variable selling expenses are $4 per book with the remaining selling expenses being fixed. The variable administrative expenses are 3% of sales with the remainder being fixed.   The contribution margin for Sam's Bookstore for the first quarter is: Multiple Choice $239,000 $758,800 $213,800 $626,200

A company had $270,000 in sales; $150,000 in goods available for sale; ending finished goods inventory of $30,000, and selling and administrative expenses of $65,000. Which of the following statements is true？ 1. Net income was 28% of sales 2. The costs of goods sold was $137,000 3. The beginning finished goods inventory is not determinable. 4. The gross income was $93,000

Gibson Boot Co. sells men’s, women’s, and children’s boots. For each type of boot sold, it operates a separate department that has its own manager. All departments are housed in a single store. In recent years, the children’s department has operated at a net loss and is expected to continue to do so. Last year’s income statements follow.     Men’s Department   Women’s Department   Children’s Department Sales $ 660,000     $ 480,000     $ 200,000   Cost of goods sold   (269,500 )     (179,600 )     (100,875 ) Gross margin   390,500       300,400       99,125   Department manager’s salary   (60,000 )     (49,000 )     (29,000 ) Sales commissions   (114,200 )     (83,600 )     (31,900 ) Rent on store lease   (29,000 )     (29,000 )     (29,000 ) Store utilities   (12,000 )     (12,000 )     (12,000 ) Net income (loss) $ 175,300     $ 126,800     $ (2,775 )   Required a. Calculate the contribution to profit. Determine whether to eliminate the children’s…