Exercise 4-17

Wilde Home & Garden is organized into three departments. The following sales and cost data are available for the prior year:

		Dept.A		Dept.B		Dept.C		Total
Sales		$285,000		$900,000		$955,000		$2,140,000
Less variable costs		125,000		565,000		755,000		1,445,000
Contribution margin		160,000		335,000		200,000		695,000
Less fixed costs		70,000		90,000		95,000		255,000
Profit		$90,000		$245,000		$105,000		$440,000

Calculate profit as a percent of sales in the prior year. (Round answer to 2 decimal places, e.g. 15.25%.)

Profit as a percent of sales

%

Suppose sales in the current year increase by 15 percent. Calculate profit as a percent of sales for the new level of sales. (Round answer to 2 decimal places, e.g. 15.25%.)

Profit as a percent of new level of sales

%