5)

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		$1,100,000	$940,000	$160,000
Cost of sales		695,000	573,400	121,600
Gross profit		405,000	366,600	38,400
Direct expenses		$177,000	$150,000	$27,000
Common expenses		138,800	119,400	19,400
Total expenses		315,800	269,400	46,400
Net income (Loss)		$89,200	$97,200	$(8,000)

a. Calculate the gross profit percentage for departments 1-3 combined and for department 4 (I PUT THESE ANSWERS IN BOLD BELOW. I NEED HELP WITH PART B.

Department 1-3 Answer

39 % Department 4Answer

24%

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

1) Operating results for department B of Shaw Company during 2016 are as follows:

Sales		$795,000
Cost of goods sold		480,000
Gross profit		315,000
Direct expenses		215,000
Common expenses		123,000
Total expenses		338,000
Net loss		$(23,000)

If department B could maintain the same physical volume of product sold while raising selling prices an average of 10% and making an additional advertising expenditure of $55,000, what would be the effect on the department's net income or net loss? (Ignore income tax in your calculations.)

Use a negative sign with your answer to indicate if the effect increases the company'snet loss.

If Department B increased its selling price by 10%, the effect on net income (loss) would be $Answer

3) Northern Company regularly sells its only product for $36 per unit and has a 25% profit on each sale. The company has accepted a special order for a number of units, the production of which would use part of its unused capacity. The special order sales price is 50% of the normal price, and the profit margin is only 60% of the regular dollar profit. What, apparently, is

Round answers to two decimal places, when applicable.

a. Northern's profit per unit on the special order?

$Answer

b. Northern's variable cost per unit?

$Answer

c. Northern's average fixed cost per unit on regular sales?

$Answer