Business, 21.10.2020 16:01 jstephanie644

Dropping Unprofitable Department Penn 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 $1,052,000 $900,000 $152,000 Cost of sales 654,000 540,000 114,000 Gross profit $398,000 $360,000 $38,000 Direct expenses $177,000 $150,000 $27,000 Common expenses 140,000 120,000 20,000 Total expenses $317,000 $270,000 $47,000 Net income (Loss) $81,000 $90,000 $(9,000) a. Calculate the gross profit percentage for departments 1-3 combined and for department 4. Department 1-3 Answer 40 % Department 4 Answer 25 % b. What effect would elimination of department 4 have had on total firm net income

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Dropping Unprofitable Department Penn Corporation has four departments, all of which appear to be pr...

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