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Analyzing Operational Changes Operating results for department B of Delta Company during 2016 are as follows: Sales $538,000 Cost of goods sold 378,000 Gross profit
Analyzing Operational Changes Operating results for department B of Delta Company during 2016 are as follows:
Sales | $538,000 | |
Cost of goods sold | 378,000 | |
Gross profit | 160,000 | |
Direct expenses | 120,000 | |
Common expenses | 66,000 | |
Total expenses | 186,000 | |
Net loss | $(26,000) |
Suppose that department B could increase physical volume of product sold by 10% if it spent an additional $17,000 on advertising while leaving selling prices unchanged. What effect would this have on the department's net income or net loss? (Ignore income tax in your calculations.)
Use a negative sign to indicate a net loss answer; otherwise do not use negative signs with your answers.
Sales | Answer | |
Cost of goods sold | Answer | |
Gross profit | Answer | |
Direct expenses | Answer | |
Common expenses | Answer | |
Total expenses | Answer | |
Net income (loss) | Answer |
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