A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto: McKenzie Sales, Ltd. Comparative Income Statement This Year Last Year Sales $7,340,000 $5,578,400 Cost of goods sold 4,610,000 3,516,000 Gross margin 2.730,000 2.062.400 Selling and administrative expenses: Selling expenses 1,381,000 1,077,500 Administrative expenses 710,000 611,500 2.091.000 1,689,000 Total expenses Net operating income 639,000 373,400 Interest expense 87,000 97,000 Net income before taxes 542,000 286,400 Members of the company's board of directors are surprised to see that net income increased by only $255,600 when sales increased by $1,761,600