Will rate if correct

QUESTION 8 Partially correct Mark 1.27 out of 2.00lag question 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 results: Garden Department All Other Departments $4,800,000 3,120,000 1,680,000 546,000 624,000 1,170,000 $510,000 Sales Cost of sales Gross profit Direct expenses $672,000 403,200 268,800 216,000 96,000 312,000 $(43,200) Common expenses Total expenses Net income (Loss) a. Calculate the gross profit percentage for the garden department and for the other departments as a group. Garden department 40 All other departments 35 b. Suppose that if the garden department were discontinued, the space occupied could be rented to an outside firm for $36,000 per year, and the common expenses of the firm would be reduced by $9,000. What effect would this action have on Richmond's net income? (Ignore income tax in your calculations.) Richmond's net income would decrease by $ 7,800 C. It is estimated that if an additional $12,000 were spent on advertising, prices in the garden center could be raised an average 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.) Use a negative sign to indicate a net loss answer; otherwise do not use negative signs with your answers. Garden Department Income Statement Sales $ 705,600 Cost of sales 403,200 Gross profit (268,800) x Direct expenses (216,000)X Common expenses 96,000 Total expenses ,017,600X Net income (Loss) 748,800 x