Income statement data for Winthrop Company for two recent years ended December 31 are as follows: Current Year Previous Year Sales $884,000 $680,000 Cost of merchandise sold 742,400 580,000 Gross profit $141,600 $100,000 Selling expenses $42,000 $35,000 Administrative expenses 38,400 30,000 Total operating expenses $80,400 $65,000 Income before income tax expense $61,200 $35,000 Income tax expenses 24,500 14,000 Net income $36,700 $21,000

Income statement data for Winthrop Company for two recent years ended December 31 are as follows: b. The net income for Winthrop Company increased between years. This increase was the combined result of an in sales and of merchandise sold increased at a rate than the increase in sales, thus causing the percentage increase in gross profit to be percentage than the percentage increase in sales