B) Suppose that if the garden apartment were discontinued, the space occupied could be rented to an outside firm for $9000 per year, and the common expenses of the firm would be you reduced by $2200. What in fact when this action have an Whitman's net income? Ignore income tax in your calculations.

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 $168,000 $1.200,000 Cost of sales 100,800 780,000 Gross profit 67,200 420,000 Direct expenses 54,000 136,500 Common expenses 24,000 156,000 Total expenses 78.000 292.500 Net income (Loss) $(10,800) $127.500 a. Calculate the gross profit percentage for the garden department and for the other departments as a group. Garden department 40 96 All other departments 35 b. Suppose that if the garden department were discontinued, the space occupied could be rented to an outside firm for $9,000 per year, and the common expenses of the firm would be reduced by $2,200. What effect would this action have on Richmond's net income? (Ignore income tax in your calculations.) Richmond's net income would decrease c. It is estimated that if an additional $3,000 were spent on advertising, p