Hair World Inc. is a wholesaler of hair supplies. Hair World uses a perpetual inventory system. The following transactions (summarized) have been selected for analysis:

a. Sold merchandise for cash (cost of merchandise $30,797). $ 55,200

b. Received merchandise returned by customers as unsatisfactory (but in perfect condition) for cash refund (original cost of merchandise $390 ). 650 c. Sold merchandise (costing $5,225 ) to a customer on account with terms n/60. 11,000 d. Collected half of the balance owed by the customer in

(c). 5,500 e. Granted a partial allowance relating to credit sales the customer in (c) had not yet paid. 176

Hair World is considering a contract to sell merchandise to a hair salon chain for $16,000. This merchandise will cost Hair World $10,480. What would be the increase (or decrease) to Hair Worlds gross profit and gross profit percentage? (Round "Gross Profit Percentage" to 1 decimal place.)