Dropping Unprofitable Department Thomas Corporation has four departments, all of which appear to be profitable except...

Question

Question

Dropping Unprofitable Department Thomas Corporation has four departments, all of which appear to be profitable except departm

business accounting

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

a. Gross profit percentage = Gross profit / sales

Department 1-3 = 465000/1550000 = 30%

Department 4 = 72000/400000 = 18%

b. The firm net income would be = $200000-60000 = $140000

Add a comment

Answer 2

Similar Homework Help Questions

Dropping Unprofitable Department Thomas Corporation has four departments, all of which appear to be profitable except...

Dropping Unprofitable Department Thomas Corporation has four departments, all of which appear to be profitable except department 4. Operating data for 2019 are as follows: Total Departments 1-3 Department 4 Sales $1,550,000 $1,250,000 $300.000 234,000 66,000 Cost of sales 1,109,000 875,000 Gross profit Direct expenses 441,000 375,000 $120,000 $144,000 $24,000 Common expenses 183,000 134,000 49,000 Total expenses 327,000 254.000 73,000 Net income (Loss) $114.000 $121,000 S17,000) Required a. Calculate the gross profit percentage for departments 1-3 combined and for department...
Dropping Unprofitable Department Thomas Corporation has four departments, all of which appear to be profitable except...

Dropping Unprofitable Department Thomas Corporation has four departments, all of which appear to be profitable except department 4. Operating data for 2019 are as follows: Total Departments 1-3 Department 4 Sales $1,000,000 $900,000 $100,000 Cost of sales 631,000 558,000 73,000 Gross profit 369,000 342,000 27,000 Direct expenses $144,000 $120,000 $24,000 Common expenses 107,000 96,000 11,000 Total expenses 251,000 216,000 35,000 Net income (Loss) $118,000 $126,000 $(8,000) Required a. Calculate the gross profit percentage for departments 1-3 combined and for department...
Dropping Unprofitable Department Thomas Corporation has four departments, all of which appear to be profitable except...

Dropping Unprofitable Department Thomas Corporation has four departments, all of which appear to be profitable except department 4. Operating data for 2019 are as follows: Total Departments 1-3 Department 4 Sales $2,100,000 $1,650,000 $450,000 Cost of sales 1,326,000 1,006,500 319,500 Gross profit 774,000 643,500 130,500 Direct expenses $144,000 $120,000 $24,000 Common expenses 316,000 200,500 115,500 Total expenses 460,000 320,500 139,500 Net income (LOSS) $314,000 $323,000 $(9,000) Required a. Calculate the gross profit percentage for departments 1-3 combined and for department...

Thomas Corporation has four departments, all of which appear to be profitable except department 4. Operating data for 2019 are as follows:

Dropping Unprofitable DepartmentThomas Corporation has four departments, all of which appear to be profitable except department 4. Operating data for 2019 are as follows:TotalDepartments 1-3Department 4Sales$962,000$810,000$152,000Cost of sales640,500526,500114,000Gross profit$321,500$283,500$38,000Direct expenses$144,000$120,000$24,000Common expenses127,000106,00021,000Total expenses$271,000$226,000$45,000Net income (Loss)$50,500$57,500$(7,000)Requireda. Calculate the gross profit percentage for departments 1-3 combined and for department 4.Department 1-3 Answer%Department 4 Answer%b. What effect would elimination of department 4 have had on total firm net income? (Ignore the effect of income tax.)The firm's net income would be: $Answer
Question 2 Answer saved Marked out of 2.00p Flag question Dropping Unprofitable Department Thomas Corporation has...

Question 2 Answer saved Marked out of 2.00p Flag question Dropping Unprofitable Department Thomas Corporation has four departments, all of which appear to be profitable except department 4. Operating data for 2019 are as follows: Total Departments 1-3 Department 4 Sales $1,000,000 $900,000 $100,000 Cost of sales 631,000 558,000 73,000 Gross profit 369,000 342,000 27,000 Direct expenses $144,000 $120,000 $24,000 Common expenses 107,000 96,000 11,000 Total expenses 251,000 216,000 35,000 Net income (Loss) $118,000 $126,000 $(8,000) Required a. Calculate the...
U A Print Question 2 Not yet answered Marked out of 2.00 Flag question Dropping Unprofitable...

U A Print Question 2 Not yet answered Marked out of 2.00 Flag question Dropping Unprofitable Department Thomas Corporation has four departments, all of which appear to be profitable except department 4. Operating data for 2019 are as follows: Total Departments 1-3 Department 4 Sales $1,000,000 $900,000 $100,000 Cost of sales 631.000 558.000 73.000 Gross profit 369.000 342.000 27.000 Direct expenses $144,000 $120,000 $24,000 Common expenses 107.000 96.000 11.000 Total expenses 251.000 216.000 35.000 Net income (Loss) $118.000 $126.000 $(8.000)...

Analyze Operational Changes Richmond's is a retail store with eight departments, including a garden department that...

Analyze Operational Changes 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...
Analyze Operational Changes Richmond's is a retail store with eight departments, including a garden department that...

Analyze Operational Changes 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 $588,000 $4,200,000 Cost of sales 352,800 2,730,000 Gross profit 235,200 1,470,000 Direct expenses 189,000 477,750 Common expenses 84,000 546,000 Total expenses 273,000 1,023,750 Net income (Loss) $(37,800) $446,250 a. Calculate the gross profit percentage for the garden department and for the...
Analyze Operational Changes Richmonds is a restore with eight departments, including a garden department that has...

Analyze Operational Changes Richmonds is a restore with eight departments, including a garden department that has been operating at a loss. The following Garden Department All Other Departments income statement gives the latest year's operating results: 470.00 GOs prot Directemes a. Calculate the gross profit percentage for the garden department and for the other departments as a group Garden department 40 % All other departments 35 b. Suppose that the garden department were discontinued, the space occupied could be rented...

Williams Company began operations in January 2019 with two operating (selling) departments and one service (Office)...

Williams Company began operations in January 2019 with two operating (selling) departments and one service (Office) department. Its departmental income statements follow. Ship WILLIAMS COMPANY Petang Departmental Income Statements For Year Ended December 31, 2019 Clock Mirror Combined Sales $ 150,000 $115,000 $ 265,000 Cost of goods sold 73,500 71,300 144,800 Gross profit 76,500 43,700 120,200 Direct expenses Sales salaries 21,000 7,100 28,109 Advertising 1,700 300 2,000 Store supplies used 700 550 1,250 Depreciation-Equipment 1,700 900 2,600 Total direct expenses...

Dropping Unprofitable Department Thomas Corporation has four departments, all of which appear to be profitable except...

Homework Answers