Please answer these 4 questions:

25) This hypothetical applies to the next four questions. You just completed your first year in business. You are working harder and making less than you planned. You recall someone saying that gross profit margin is important (Connor). If your first year COGS was $720,000 on sales of $1,500,000, how much profit are you losing if the average gross margin from your industry scorecard is 55% (SHOW YOUR WORK)

26) What is the culprit for the lower-than-average gross profit?

a. Low sales

b. Too much inventory notes

c. High liabilities

d. Low productivity

27) Upon analysis, you discover that your bookkeeper routinely paid for materials only when due. If materials costs were $500,000, and half of your vendor purchases offer 2% 10 Net 30 terms, how much could you improve gross margin if taking advantage of the discount?

a) $14,400

b) $10,000

c) $5,000

d) $2,500

28) If you can improve the gross profit margin to 54% and fixed costs are projected at $650,000, how much must you make in sales to achieve a target net profit margin of 15 %? (SHOW YOUR WORK)