Comparative income statements for 2012 and 2011 follow (15 points total)

	2012	2011
Sales	9,434,000	7,862,000
Cost of Sales	7,075,400	5,660,640
Gross Profit	2,358,600	2,201,360
Operating Expenses	1,376,069	1,365,060
Operating Income	982,531	836,300
Interest Expense	157,500	126,000
Earnings Before Tax	825,031	710,300
Income Taxes	396,015	317,200
Net Income	429,016	393,100

a.	Prepare a vertical common-size analysis of this statement for each year. (10 points)
b.	Explain in plain english (as taught in class) the difference between gross profit in 2011 and 2012 (5 points).

Note, you must show the basic formula you use for these calculations, but you do not have to show each calculation.