Question 35 2 pts Compared to the prior period, Royal Company has experienced a five percent increase in its profit margin and a 6% decrease in its gross profit rate. Consider the following statements. Statement #1: The improved profit margin could result from a decrease in sales allowances, compared to the prior period. Statement #2: The decrease in gross profit rate could result from an increase in Salaries Expense, compared to the prior period. Statements #1 and #2 are true. Statements #1 and #2 are false. Statement #1 is true and Statement #2 is false. Statement #2 is true and Statement #1 is false