This Year Last Year Sales $ 7,400,000 $ 5,624,000 Cost of goods sold 4,670,000 3,507,500 Gross margin 2,730,000 2,116,500 Selling and administrative expenses: Selling expenses 1,387,000 1,075,000 Administrative expenses 709,000 617,500 Total expenses 2,096,000 1,692,500 Net operating income 634,000 424,000 Interest expense 98,000 92,000 Net income before taxes $ 536,000 $ 332,000