Campus Stop is considering a contract to sell merchandise to a campus organizati
ID: 2541066 • Letter: C
Question
Campus Stop is considering a contract to sell merchandise to a campus organization for $24,000. This merchandise will cost Campus Stop $14,900. What would be the increase or decrease to Campus Stop's gross profit and gross profit percentage? TIP: The impact on gross profit (a dollar amount) may differ from the impact on gross profit percentage. (Round "Gross Profit Percentage" to 1 decimal place.)
Campus Stop, Inc., is a student co-op. Campus Stop uses a perpetual inventory system. The following transactions (summarized) have been selected for analysis:
Campus Stop is considering a contract to sell merchandise to a campus organization for $24,000. This merchandise will cost Campus Stop $14,900. What would be the increase or decrease to Campus Stop's gross profit and gross profit percentage? TIP: The impact on gross profit (a dollar amount) may differ from the impact on gross profit percentage. (Round "Gross Profit Percentage" to 1 decimal place.)
Campus Stop, Inc., is a student co-op. Campus Stop uses a perpetual inventory system. The following transactions (summarized) have been selected for analysis:
a. Sold merchandise for cash (cost of merchandise $160,750). $ 294,300 b. Received merchandise returned by customers as unsatisfactory (but in perfect condition) for cash refund (original cost of merchandise $930). 1,730 c. Sold merchandise (costing $13,050) to a customer on account with terms 2/10, n/30. 29,000 d. Collected half of the balance owed by the customer in (c) within the discount period. 14,210 e. Granted a partial allowance relating to credit sales that the customer in (c) had not yet paid. 1,980
Explanation / Answer
Change in Gross Profit 9100 Change in Gross Profit Percentage -0.58% Particulars Sales Cost (a) 294300 160750 (c) 29000 13050 Total 323300 173800 Less :- (Sales Return Impact) -1730 -930 Net Sales and Cost before the transaction with Campus orgaization 321570 172870 Gross Profit before the transaction with Campus orgaization (Sales - Cost of sales) 148700 Gross Profit per centage before the transaction with Campus orgaization (GP/Sales*100) 46.24% Sales to Campus Organization 24000 14900 Total Sales 345570 187770 New Gros Profit 157800 New Gros Profit Percentage 45.66% Change in Gross Profit 9100 Change in Gross Profit Percentage -0.58%
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