The question is to Identify the main reasons for the change in gross profit and net income between the two years.

Manutech Ltd.'s industrial product sales were down in 2017 . Fortunately, after investing in a customer relationship management system, it was able to turn its operations around in 2018 . Selected financial statements follow: MANUTECH LTD. Statement of Financial Position December 31 Assets 2018 Current assets \begin{tabular}{lrr} Cash & $30,000 & $79,500 \\ Accounts receivable & 150,000 & 105,000 \\ Inventory & 112,000 & 90,000 \\ Total current assets & 292,000 & 274,500 \\ Property, plant, and equipment (net) & 1,100,000 & 965,000 \\ Intangible assets & 120,000 & 120,000 \\ \hline Total assets & $1,512,000 & $1,359,500 \\ \hline \end{tabular} Liabilities and Shareholders' Equity Liabilities Current liabilities Accounts payable Accrued liabilities \begin{tabular}{rrr} $65,000 & & $72,500 \\ 15,000 & 20,000 \\ 85,000 & 0 \\ 20,000 & & 20,000 \\ \cline { 1 - 1 } 185,000 & & 112,500 \\ 630,000 & & 650,000 \\ \cline { 1 - 1 } 5 & & 762,500 \\ \cline { 1 - 1 } 5 & & \end{tabular} Shareholders' equity Common shares, 10,000 shares issued 100,000100,000 Retained earnings Total shareholders' equity Total liabilities and shareholders' equity Additional information for 2021: 1. Assume all sales were credit sales. 2. Manutech has no bad debts and no allowance for doubtful accounts. 3. Property, plant, and equipment increased in 2021 by the $300,000 cost of a new customer relationship management system and decreased by additional accumulated depreciation for the year of $165,000. 4. $20,000 of the mortgage was repaid in 2021 . 5. Cash dividends paid during the year amounted to $170,000. 6. Selected industry averages for 2021 : Ratio Industry Average Asset turnover 0.8 times Average collection period 28 days Current ratio 2.0:1 Days in inventory 40 days Debt to total assets 50.0% Gross profit margin 44.5% Profit margin 15.1% Return on assets 12.5% Times interest earned 5.0 times Answer the following question from management: "We know that the sales volume has increased, but we don't know if gross profit and net income are increasing in proportion to sales: can you tell us?" Identify the primary reason(s) for the change in gross profit and net income between the two years