Comparative income statements for Callister Company for 2003 and 2002 are given on the following page. — Prepare common-size income statements for Callister Company for 2003 and 2002. 2. The profit margin for Callister is lower in 2003 than in 2002. What expense or expenses are causing this lower profitability?

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Sales. Cost of goods sold Gross profit.. Selling and administrative expenses Operating income Interest expense Income before taxes Income tax expense Net income.. 2003 $1,600,000 1,020,000 $ 580,000 200,000 $ 380,000 80,000 $ 300,000 90,000 $ 210,000 2002 $900,000 480,000 $420,000 160,000 $260,000 60,000 $200,000 60,000 $140,000