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$150,4 Dropping Unprofitable Department Thomas Corporation has four departments, all of which appear to be...

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Accounting

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$150,4 Dropping Unprofitable Department Thomas Corporation has four departments, all of which appear to be profitable except department 4. Operating data for 2019 are as follows: Total Departments 1-3 Department 4 Sales $950,000 $800,000 $150,000 Cost of sales 626,000 512,000 114,000 Gross profit $324,000 $288,000 $36,000 Direct expenses $144,000 $120,000 $24,000 Common expenses 125,000 105,000 20,000 Total expenses $269,000 $225,000 $44,000 Net income (Loss) $55,000 $63,000 $(8,000) Required a. Calculate the gross profit percentage for departments 1-3 combined and for department 4. Department 1-3 O * % Department 4 24 % 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 Check

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