Chapter 9 Homework:

1. Net sales for the year were $300,000 and cost of goods sold was $174,000 for the company's existing products. A new product is presently under development and has an expected selling price of not more than $55 per unit in order to remain competitive with similar products in the marketplace. Required: (a.) Calculate gross profit and the gross profit ratio for the year. (b.) What is the maximum cost per unit that can be incurred to manufacture the new product so that the product can be priced competitively and will not result in a reduction to the company's gross profit ratio?

2. Sparkle Cleaners, Inc., had net income of $258,025 for its fiscal year ended September 30, 2017. During the year, the company had outstanding 12,000 shares of 8%, $50 par value preferred stock, and 135,500 shares of common stock. Calculate the basic earnings per share of common stock for the 2017 fiscal year.

Gwinnett Park Co. reported net income of $253,300 for its fiscal year ended September 30, 2017. At the beginning of that year, 150,000 shares of common stock were outstanding. On February 1, 2017, an additional 30,000 shares were issues. On September 1, 2017, 12,000 shares were purchased as treasury stock. During the year, the company paid the annual dividend on 7,000 shares of its 8%, $60 par value preferred stock that were outstanding during the entire fiscal year. Calculate the basic earnings per share of common stock for the year ended September 30, 2017. Calculate weighted-average number of shares of common stock outstanding during the fiscal year ended September 30, 2017: