Brulé Ltee”s statement of comprehensive income shows the following:
|
2012 |
2011 |
|
|
Sales |
$1,250,000 |
$1,175,000 |
|
Cost of sales |
787,000 |
715,000 |
|
Selling & admin. expenses |
324,000 |
323,000 |
Based on these figures, which one of the following statements is true?
- Sales, cost of sales, and selling and administration expenses have all increased, therefore operating profit, gross margin, and operating margin have all increased.
- Although the operating profit has decreased, the operating margin has increased as a result of sales growth and an increase in gross profit.
- The operating profit has decreased due to lower gross margins and higher expenses, despite sales growth.
- Although the operating profit has increased, the operating margin has decreased as a result of a reduction in the gross margin and higher expenses, despite sales growth.