Broadening Your Perspective 5-5 Three years ago, Amy Hessler and her brother-in-law Jacob Seelig opened Family Department Store. For the first two years, business was good, but the following condensed income resuts for 2016 were disappointing For the Year Ended December 31, 2016 630,000 504,000 Cost of goods sold Gross profi Operating expenses 126,000 Selling expenses 80,000 6,00096,000 Army believes the protiem les in the relatively low gross prete rate (gross profit dvided by net sales) of 20%, 3acob believes the problem Amy thinks the gross profit rate can be improved by making both of the following changes. She does not anticipate that these changes wil have any effect on operating expenses 1. that operstr gepen" are toe ligh Increase average selling prices by 17%. Tha increase is expected to lower sales volume so that tat, sales wil incre." orly 2. Buy merchandise in larger quanties and take all purchase dscounts. These changes are exipected to increase the gros proft rate by 3 percentage brstedv | points lacob thinks expenses can be cut by making both of the following changes. He feels that these changes wll not have any effect on net sale 1. Cut sales salaries eB60,000 in half and grve sales personnel commission of 2% of net sales. 2. Reduce store deliveries to one day per week rather than twice a week. This change will reduce delivery espenses of 30,000 b 40%