Prepare a horizontal analysis of the following comparative income statement of R. Hanson, Inc. Round percentage changes to the nearest tenth of a percent.

Requirement 1. Why did net income increase by a higher percent than total revenues increased during 2010?

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Revenue Expenses: R. Hanson, Inc. Comparative Income Statement Years Ended December 31, 2010 and 2009 Cost of Goods Sold Selling and General Expenses Interest Expense Income Tax Expense Total Expenses Net Income 2010 2009 $492,000 $447,600 242,000 226,000 117,600 111,600 8,000 5,000 50,500 44,600 418,100 387,200 $ 73,900 $ 60,400