61 What helped Smartistry's profitability in 20Y1 as it experienced a decrease in sales? O Change in interest expense in proportion to sales O Reduction in sales and general expenses O Reduction in production cost Change in taxes in proportion to sales (62 Which statement correctly analyzes the company's performance in 20YO? The company's profitability Increased becasue of the reduction in taxes proportional to sales in 2010. The company's profitability decreased because of the increase in interest expenses proportional to sales in 2010. The company's profitability decreased because of the increase in production cost proportional to sales in 200 The company's profitability increased because of the reduction in sales and general expenses proportional to sales in 2010. Next 2009 780,000 457,000 323,000 185,000 138,000 25,000 113,000 38,500 74,500 Smartistry Common Size Income Statements For the Years Ended December 31, 20'X'9, 2040, 2041 2011 20 YO Year-to-Year % Sales Year-to-Year -256% 100.00% 800,000 15 63% -551% 58.59% 500,000 8.08% 2.95% 4141K 300,000 7.54% -0.28% 23.72% 187,200 4.67% 3.23% 17.69% 112,800 2.88% 0.00% 3.21% 25,000 1.56% 3.23% 14.49% 87,800 1315 1.12% 4.94% 29,800 0.83% 2.12% 58,000 0.49% Sales 97.50% 57.13% 40 38% 23.13% 17.25 3133 14.13 4815 9.31 675,000 435, 350 239,650 149,850 89,800 12.500 77,300 23,200 54.100 Sales 11556 67.70% 47.85% 27 AIK 20.44% 3.70% 16 74% 5.70 7 Net Sales 8 Cost of goods sold 9 Gross profit on sales 10 Selling and general expenses 11 Operating Income 12 Interest expense 13 Income (loss) before income tax 14 Income tax expense (refund) 15 Net income (loss) 16 17 18 19 20 11.04 9.55%