Dropping Unprofitable Department Thomas Corporation has four departments, all of which appear to be profitable except...

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Dropping Unprofitable Department Thomas Corporation has four departments, all of which appear to be profitable except department 4. Operating data for the year are as follows: Departments 1-3 Department 4 Sales Cost of sales Total $2,100,000 $1,650,000 $450,000 1,326,000 1,006,500 319,500 Gross profit 774,000 643,500 130,500 Direct expenses $144,000 $120,000 $24,000 Common expenses 316,000 200,500 115,500 Total expenses 460,000 320,500 139,500 Net income (Loss) $314,000 $323,000 $(9,000) Required a. Calculate the gross profit percentage for departments 1-3 combined and for department 4. Department 1-3 0 Department 40 % % b. What effect would elimination of department 4 have had on total firm net income? (Ignore the effect of income tax.) The firm's net income would be: $ 0 Dropping Unprofitable Department Thomas Corporation has four departments, all of which appear to be profitable except department 4. Operating data for the year are as follows: Departments 1-3 Department 4 Sales Cost of sales Total $2,100,000 $1,650,000 $450,000 1,326,000 1,006,500 319,500 Gross profit 774,000 643,500 130,500 Direct expenses $144,000 $120,000 $24,000 Common expenses 316,000 200,500 115,500 Total expenses 460,000 320,500 139,500 Net income (Loss) $314,000 $323,000 $(9,000) Required a. Calculate the gross profit percentage for departments 1-3 combined and for department 4. Department 1-3 0 Department 40 % % b. What effect would elimination of department 4 have had on total firm net income? (Ignore the effect of income tax.) The firm's net income would be: $ 0

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