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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:
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 $1,340,000 $1,140,000 $200,000 Cost of sales 887,600 729,600 158,000 Gross profit 452,400 410,400 42,000 Direct expenses $177,000 $150,000 527,000 Common expenses 148,000 124.000 24,000 Total expenses 325.000 274,000 51.000 Net income (Loss) $127,400 $136,400 $29,000) a. Calculate the gross profit percentage for departments 1-3 combined and for department Department 1-3 Department 4 % b. What effect would elimination of department 4 have had on total firm net income? Cignore the effect of income tax) The firm's net income would be: $ Check
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