A comparative income statement is given below for McKenzie Sales, Limited, of Toronto McKenzie Sales, Limited Comparative Income Statement Sales This Year $7,340,000 Last Year $5,578,400 Cost of goods sold 4,600,000 3,513,500 Gross margin Selling and administrative expenses: Selling expenses Total expenses Net operating income Administrative expenses 2,740,000 2,064,900 1,374,000 1,075,000 709,500 613,000 2,083,500 1,688,000 656,500 376,900 101,000 93,000 $ 555,500 Interest expense Net income before taxes $283,900 Members of the company's board of directors are surprised to see that net income increased by only $271,600 when sales is by $1,761,600