Crystal Clears statistical department:

Gross sales $135,000

Alteration and workroom costs $ 1,000

Opening inventory, at cost $ 49,500

Closing inventory, at cost $ 61,000

New purchases, at cost $ 77,500

Inward freight $ 1,500

Cash discounts 4% (of new purchases)

General overhead $ 11,000

Advertising $ 9,000

Salaries $ 20,000

Rent $ 8,600

Customer returns and allowances $ 15,000

Ms. Kane obtained, from outside research, profit and loss data on her competitor, China Seas, which had the following results for the same year:

Profit = 6% or $7,350 | Operating expenses = 40%

Ms. Kane then prepared a skeletal profit and loss statement for her department and for that of her competitor China Seas. Upon completion of this task, she compared the two statements. Support the suggested action mathematically.

Develop 2 P & L statement to compare Crystal Clear and China Seas performance.

(Note: Use concepts from RMI to calculate Total Cost of Goods Sold. Calculate operating profit based on the direct/indirect expenses mentioned above.)