r. Gupta Diagnostics income statement for 20XX is as follows:

Sales	$2,440,000
Cost of goods sold	1,460,000
Gross profit	980,000
Selling and administrative expense	373,000
Operating profit	607,000
Interest expense	53,500
Income before taxes	553,500
Taxes (30%)	166,050
Income after taxes	$387,450

a. Compute the profit margin in 20XX. (Round the final answer to 2 decimal places.)

Profit margin %

b. Assume in 20XY sales increase by 10 percent and cost of goods sold increases by 20 percent. The firm is able to keep all other expenses the same. Once again, assume a tax rate of 30 percent. What are the income after taxes and profit margin in 20XY? (Round the profit margin to 2 decimal places.)

	20XY
Income after taxes	$
Profit margin	%