Amount Percent Average Sales $970,000 % 100.0% Cost of merchandise sold 669,300 % 74% Gross profit $300,700 % 26% Selling expenses $174,600 % 14% Administrative expenses 67,900 % 6% Total operating expenses $242,500 % 20% Income from operations $58,200 % 6% Other revenue and expense: Other revenue 19,400 % 2% Other expense (9,700) % 1% Income before income tax $67,900 % 7% Income tax expense 29,100 % 5% Net income $38,800 % 2% b. The company is managing the cost of manufacturing product sales to be than the industry, and has slightly selling and administrative expenses relative to the industry. The combined impact causes net income as a percent of than the industry average.