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please show work -1A. Analyze Operational Changes Richmond's is a retail store with eight departments, including a garden department that has been operating at a
please show 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 th latest year's operating results: Required a. Calculate the gross profit percentage for the garden department and for the other departments 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 effect 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 averuge of 5% without a change in physical volume of products sold. What effect would this have on the operating results of the garden department? (Again, ignore income tax in your calculations.) Step by Step Solution
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Step: 1
a Calculate the gross profit percentage for the garden department and for the other departments as a group The gross profit percentage is calculated as Grossprofitpercentage Grossprofit Sales 100 text...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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