When advertising a test product, should test locations in particular markets be isolated from media with a far reach, such as television?

Yes

Explanation:

In a test scenario such as this one, the test locations should be isolated from media with a far reach, such as television. This is mainly due to the fact that if media advertising reaches areas outside the market being tested, it will eventually attract customers from outside the test population which will in term contaminate the data. This can lead to false results, such as a product selling more than it really will.

Gross Profit     $23720  

Gross profit percentage 39.323%

Explanation:

The discounts allowed are subtracted from the sales .Also the sales allowances are deducted in the income statement.

Purrfect Pets

Sales units 6100

Sales Price $10

Sales                                                                          $ 24000

Less Sales Discounts (2% of 10) *2400                       (480)

Sales                                                                           $ 23520

Add Sales without discount (6100-2400)*10              $37000

Total Sales                                                                   $ 60520

Less Sales Allowances                                                 (200)

Net Sales                                                                      $ 60320

Less Purchases (6100* 6)                                            $ 36600

Gross Profit                                                                     $23720                  

Gross profit percentage= Gross Profit /Sales *100 %

Gross profit percentage= $23720    / $ 60320* 100%= 39.323%