Solution-Calculate profit as a percent of sales in the

Calculate profit as a percent of sales in the prior year

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Reference no: EM131809400

Refer to the in Exercise 4-16.(Round all decimals answers to 4 places and dollar answers to the nearest dollar.)

Required

a. Calculate profit as a percent of sales in the prior year.

b. Suppose sales in the current year increase by 15 percent. Calculate profit as a percent of

Sales for the new level of sales and explain why the percent is greater than the one calculated in part a.

Solution: Computation for the Profit Margin

Please see reference below. And please show all calculations.

Exercise 4-16. Multiproduct, Contribution Margin Ratio [LO 4] (Using Only the Data) Wilde Home & Garden is organized into three departments. The following sales and cost data are available for the prior year:

Particulars	Dept A	Dept B	Dept C	Total
Sales	$450,000	$600,000	$750,000	$1,800,000
Less: Variable cost	$270,000	$450,000	$450,000	$1,170,000
Contribution Margin	$180,000	$150,000	$300,000	$630,000
Less: Fixed Cost	$70,000	$90,000	$100,000	$260,000
Profit	$110,000	$60,000	$200,000	$370,000

Reference no: EM131809400

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Calculate profit as a percent of sales in the prior year

Reference no: EM131809400

Reference no: EM131809400

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