The President of Leyesa Corporation was informed that production costs were $3\%$ lower in $2023$ than that of $2022.$ Statistics shown by the selling division indicated that the quantity sold in $2023$ was significantly greater than quantity sold in $2022.$

The President is wondering why, despite the favorable information provided by the selling and production division, gross margin for $2022$ was still higher than that of $2023$ as shown below:

December $31,2020$

Net Sales $1,305,00$

Cost of Sales $843,900$

Gross Margin $461,100$

December $31,2019$

Net Sales $1,160,000$

Cost of Sales $696,000$

Gross Margin $464,000$

REQUIRED:

Prepare a statement accounting for the changes in gross margin that will show the details of changes using:

a$.$ Two$-$way Analysis

b$.$ Three$-$way Analysis