A comparative income statement is given below for McKenzie Sales, Ltd., of Toronto:

            

McKenzie Sales, Ltd. Comparative Income Statement
	This Year	Last Year
Sales ……	$8,000,000	$6,000,000
Cost of goods sold ……	4,984,000	3,516,000
Gross margin ……	3,016,000	2,484,000
Selling and administrative expenses:
Selling expenses……	1,480,000	1,092,000
Administrative expenses……	712,000	618,000
Total expenses ……	2,192,000	1,710,000
Net operating income ……	824,000	774,000
Interest expense ……	96,000	84,000
Net income before taxes	$ 728,000	$ 690,000

Members of the company’s board of directors are surprised to see that net income increased by only $38,000 when sales increased by two million dollars.

Required:

1. Express each year’s income statement in common-size percentages. Carry computations to one decimal place.

2. Comment briefly on the changes between the two years.