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Please show work for part B Analyze Operational Changes Richmond's is a retail store with eight departments, including a garden department that has been operating
Please show work for part B
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 result Sales Cost of sales Gross profit Direct expenses Common expenses Total expenses Net income (Loss) Garden Department $168,000 100,800 67.200 54,000 24,000 78,000 $(10,800) All Other Departments $1,200,000 780,000 420,000 136,500 156,000 292,500 $127,500 a. Calculate the gross profit percentage for the garden department and for the other departments as a group. Gardendepartment! 40-% All other departments 35-96 b. Suppose that if the garden department were discontinued, the space occupied could be rented to an outside firm for $9,000 per year, and the common expenses of the firm would be reduced by $2.200. What effect would this action have on Richmond's net income? (lgnore income tax in your calculations.) Richmond's net income would decrease # by $ (23,600) Step by Step Solution
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