Refer to the data in Exercise 4-16 (Round all decimal answers to 4 places and all dollar answers to the nearest dollar.)

In Exercise 4-16, Wilde Home & Garden is organized into three departments. The following sales and cost data are available for the prior year:

Required
a. Calculate profit as a percent of sales in the prior year.
b. Suppose sales in the current year increase by 15 percent. Calculate profit as a percent of sales for the new level of sales and explain why the percent is greater than the one calculated in parta.

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Total Dept.A $270,000 110,000 Contribution margin 160,000 Less fixed costs 70,000 $ 90,000 Dept.B $855,000 520,000 335,000 Dept. C $910,000 710,000 200,000 Sales Less variable costs $2,035,000 1,340,000 695,000 Profit $245,000 $105,000 440,000