Profitability Analysis Kolby Enterprises reports the following information on its income statement: Net sales $250,000 Administrative expenses $40,000 Cost of goods sold Selling expenses 75,000 35,000 170,000 Other income 70,000 Other expense Required Calculate Kolby's 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 a expected to change. How will this affect Kolby's gross profit percentage and return on sales ratio? (Round all answers to 1 decimal place.) Gross Profit Percentage Return on Sales IF NEW PRODUCT IS MADE Gross Profit Percentage Return on Salor % x 0% x 0% x

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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**Profitability Analysis**

Kolby Enterprises reports the following information on its income statement:

- **Net sales:** $250,000
- **Cost of goods sold:** $170,000
- **Selling expenses:** $70,000
- **Administrative expenses:** $40,000
- **Other income:** $75,000
- **Other expense:** $35,000

**Required**

Calculate Kolby's 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 Kolby's gross profit percentage and return on sales ratio? (Round all answers to 1 decimal place.)

|                                             |                          |
|---------------------------------------------|--------------------------|
| **Gross Profit Percentage**                 | \_\_%                    |
| **Return on Sales**                         | \_\_%                    |
| **IF NEW PRODUCT IS MADE**                  |                          |
| **Gross Profit Percentage**                 | 0 \_%                    |
| **Return on Sales**                         | 0 \_%                    |

The task is to fill in the blanks for current and projected gross profit percentage and return on sales.
Transcribed Image Text:**Profitability Analysis** Kolby Enterprises reports the following information on its income statement: - **Net sales:** $250,000 - **Cost of goods sold:** $170,000 - **Selling expenses:** $70,000 - **Administrative expenses:** $40,000 - **Other income:** $75,000 - **Other expense:** $35,000 **Required** Calculate Kolby's 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 Kolby's gross profit percentage and return on sales ratio? (Round all answers to 1 decimal place.) | | | |---------------------------------------------|--------------------------| | **Gross Profit Percentage** | \_\_% | | **Return on Sales** | \_\_% | | **IF NEW PRODUCT IS MADE** | | | **Gross Profit Percentage** | 0 \_% | | **Return on Sales** | 0 \_% | The task is to fill in the blanks for current and projected gross profit percentage and return on sales.
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