Income Statement for Xenon Manufacturing:

	2011	2012
Total sales	202	212
Cost of sales	-148	-172
Gross Profit	54	40
Selling, general, and administrative expenses	-22	-20
Research and development	-8	-7
Depreciation and amortisation	-4	-3
Other income	4	6
Earnings before interest and taxes (EBIT)	24	16
Interest income (expense)	-7	-4
Pretax income	14	12
Taxes	-4	-3
Net Income	10	9

Consider the above Income Statement for Xenon Manufacturing. All values are in millions of dollars. Calculate the operating margin for 2011 and 2012. What does the change in the operating margin between these two years imply about the company?

Select one:

A. The leverage of Xenon Manufacturing fell slightly between 2011 and 2012.

B. The ability of Xenon Manufacturing to sell its goods and services for more than the costs of producing them rose between 2011 and 2012.

C. The efficiency of Xenon Manufacturing has significantly risen between 2011 and 2012.

D. The efficiency of Xenon Manufacturing has significantly fallen between 2011 and 2012.