Dropping Unprofitable Department Penn Corporation has four departments, all of which appear to be profitable except department 4. Operating data for 2019 are as follows: Total Departments 1-3 Department 4 Sales $1,100,000 $940,000 $160,000 Cost of sales 695,000 573,400 121,600 Gross profit 405,000 366,600 38,400 Direct expenses $177,000 $150,000 $27,000 Common expenses 138,800 119,400 19,400 Total expenses 315,800 269,400 46,400 Net income (Loss) $89,200 $97,200 $(8,000) a. Calculate the gross profit percentage for departments 1-3 combined and for department 4. Department 1-3 % Department 4 % b. What effect would elimination of department 4 have had on total firm net income? (Ignore the effect of income tax.) The firm's net income would be: $