Energy Star's income statement is as follows:

	2019	2020
Sales (units)	2,600	3,500
Sales revenue	$130,000	$175,000
Total expenses	110,000	128,000
Net income	$20,000	$47,000

a. Use the high-low method to estimate variable and fixed costs for 2020.

b. What assumptions did you make in answering (a)?

c. When would it be unwise to use high-low analysis to estimate costs?

d. What is the break-even point in 2020?

e. If advertising expenditure was increase by $1,000 in 2020, how would this affect the break-even point?

f. Why does the break-even point change when advertising expenses is increased?