UDEN SUPPLY COMPANY Comparative Income Statements VARIANCE Years Ended December 20X1, 20X2, and 20X3 20X2 Audited 20X4 Expected 20X1 - 20X2 20X2 - 20X3 20X3 - 20X4 (Thousands) 20X1 Audited 20X3 Audited Sales 9,300,00 10,200.00 11,100.00 12,000.00 900.00 900.00 900.00 Cost of goods sold 6,420.00 7,050.00 7,690.00 8,553.51 630.00 640.00 863.51 2,880.00 3,150.00 3,410.00 3,446.49 270.00 260.00 36.49 Gross profit Gross Profit Rates 30.97% 30.88% 30.72% 28.72% Sales commissions 650.00 710.00 780.00 845.00 60.00 70.00 65.00 Advertising 186.00 200.00 220.00 237.00 14.00 20.00 17.00 Salaries 1,071.00 1,094.00 1,117.00 1,140.00 23.00 23.00 23.00 Payroll taxes 186.00 192.00 198.00 207.00 6.00 6.00 9.00 Employee benefits 169.00 174.00 179.00 184.00 5.00 5.00 5.00 Rent 62.00 67.00 68.00 Average of 2 71.00 5.00 1.00 3.00 Depreciation 62.00 65.00 68.00 71.00 3.00 Periods 3.00 3.00 Supplies 28.00 32.00 36.00 40.00 4.00 4.00 4.00 Utilities 23.00 26.00 29.00 32.00 3.00 3.00 3.00 Legal and accounting 36.00 41.00 46.00 51.00 5.00 5.00 5.00 Miscellaneous 14.00 17.00 20.00 23.00 3.00 3.00 3.00 Interest expense 234.00 252.00 264.00 300.00 18.00 12.00 Total Expenses 2,721.00 36.00 2,870.00 3,025.00 3,201.00 Net income before taxes 159.00 280.00 385.00 245.49 Income taxes 36.00 63.00 86.00 42.56 Net income 123.00 217.00 299.00 202.92 Tax Rate 0.2264 0.2250 0.2234 0.1734 Reduction in Tax Rate Not RoundedChoose the five most important variances that do not meet the expected range and explain the auditing strategies and techniques (i.e., sampling or testing) you would use to determine why