Question
. Niklos Boot Co. sells mens, womens, and childrens boots. For each type of boot sold, it operates a separate department that has its own
. Niklos Boot Co. sells mens, womens, and childrens boots. For each type of boot sold, it operates a separate department that has its own manager. The manager of the mens department has a sales staff of nine employees, the manager of the womens department has six employees, and the manager of the childrens department has three employees. All departments are housed in a single store. In recent years, the childrens department has operated at a net loss and is expected to continue to do so. Last years income statements follow. Mens Department Womens Department Childrens Department Sales $ 700,000 $ 500,000 $ 200,000 Cost of goods sold (272,500 ) (182,000 ) (103,875 ) Gross margin 427,500 318,000 96,125 Department managers salary (66,000 ) (55,000 ) (35,000 ) Sales commissions (120,200 ) (89,600 ) (34,900 ) Rent on store lease (35,000 ) (35,000 ) (35,000 ) Store utilities (18,000 ) (18,000 ) (18,000 ) Net income (loss) $ 188,300 $ 120,400 $ (26,775 )
Calculate the net income for the company as the whole with the children's department
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