PINE TREE COMPANY COMPARATIVE INCOME STATEMENTS FOR THE YEARS ENDED 12/31/17 AND 12/31/16 (in $ thousands) 2017 2016 Sales 1,969 1,718 Less: Cost of Goods Sold 1,091 886 Gross profit 878 832 Less: operating expenses Wage expense 195 176 Depreciation expense 36 29 Rent expense 46 40 Miscellaneous expense 49 77 Total operating expenses 326 322 Operating income 552 510 Less: interest expense 19 66 Income before tax 533 444 Less: income tax expense 213 178 Net income 320 266 Which is the best explanation for the change in operating income % from 2016 to 2017? 1. Increase in sales 2. Decrease in operating expenses 3. Increase in production costs 4. Increase in income tax expense