Calculate departmental gross profit percentages

INCOME STATEMENT WITH DEPARTMENTAL GROSS PROFIT AND OPERATING INCOME Bacon and Hand Distributors has divided its business into two departments: retail sales and wholesale sales. The following information is provided for the year ended December 31, 20–:Net sales, retail sales department ……….$570,000Net sales, wholesale sales department ……….830,000Cost of goods sold, retail sales department ……319,200Cost of goods sold, wholesale sales department ….398,400Warehouse wages expense ………….110,000Truck drivers’ wages expense ………….90,500Advertising expense …………….70,000Warehouse lease expense …………..40,000Depreciation expense—delivery equipment …….12,000Other operating expenses ………….130,000

REQUIRED

1. Prepare an income statement showing departmental gross profit and total operating income.

2. Calculate departmental gross profit percentages.

Solution: