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how do i solve parts a-c with work? -1A. Analyze Operational Changes Richmond's is a retail store with eight departments, including a garden department that
how do i solve parts a-c with work?
-1A. Analyze Operational Changes Richmond's is a retail store with eight departments, including a garden department that has been operating at a loss. The following condensed income statement gives the latest year's operating results: Required a. Calculate the gross profit percentage for the garden depariment and for the other depariments as a group. b. Suppose that if the garden department were discontinued, the space occupied could be rented to an outside firm for $18,000 per year, and the common expenses of the firm would be reduced by $4,500. What effeet would this action have on Richmond's net income? (Ignore income tax in your calculations.) c. It is estimated that if an additional $6,000 were spent on advertising, prices in the garden center could be raised an average of 5% without a change in physical volume of products sold. What effect would this have on the operating resuls of the garden department? (Again, ignore income tax in your calculations.) Step by Step Solution
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