Profitability Analysis

Kolby Enterprises reports the following information on its income statement:

Net sales$220,000Administrative expenses$10,000

Cost of goods sold140,000Other income15,000

Selling expenses40,000Other expense5,000

Required

Calculate Kolbys gross profit percentage and return on sales ratio. Kolby is planning to add a new product and expects net sales to be $30,000 and cost of goods to be $25,000. No other income or expenses are expected to change. How will this affect Kolbys gross profit percentage and return on sales ratio?

(Round all answers to 1 decimal place.)