***PLEASE ANSWER THESE TOGETHER THEY ARE TOGETHER** FIGURE 1 & 2

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Consider the following two years of ABC Inc.'s income statement. FIGURE 1 The costs of good sold Is a larger fraction of Sales in Year 1 than Year 2. Is a smaller fraction of Sales in Year 1 than Year 2. Caused gross margin to fall in Year 2 relative to Year 1. Cause the interest expense to increase in Year 2. Using Figure 1, we can tell that Income taxes are a lager fraction of sales revenue in Year 2. Gross margin increased in Year 2 as a fraction of sales. Selling and administrative expense was lower in Year 1. Interest expense increased in Year 2. Using Figure 2, which item has the highest percentage change? FIGURE 2 ABC Inc. Income Statement Rent on office Net Sales Maintenance Office supplies Using Figure 2, which statement is most correct? Net income declined by over 20% due, largely, to a drop in revenue Net income increased by over 20% despite a drop in revenue Net income declined by over 40% due largely to the increase in maintenance expense. Net income declined by over 40% due largely to the decrease in wages