Monique Smith is the owner of Monique Tapestries, which wholesales fine tapestries to retail stores. Because Smith was not satisfied with her company's earnings in 20x7, she raised prices in 20x8, thereby increasing gross margin from sales from 30 percent in 20x7 to 35 percent in 20x8. Smith is pleased that net income went up from 20x7 to 20x8, as shown in the comparative income statements that follow. Total assets for Monique Tapestries at year end for 20x6, 20x7, and 20x8 were $1,246,780, $1,386,810, and $1,536,910, respectively?

Has Monique Tapestries' profitability really improved?

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20x8 20x7 Revenues Net sales $1,222,600 $1,386,400 Costs and expenses Cost of goods sold Seg and administrative expenses Total costs and expenses S 794,690 970,480 333,008 1,133,088 $1,303,488 338,398 Net income $ 89,512 $82,912