Smith & Chief Ltd. of Sydney, Australia, is a merchandising firm that is the sole distributor of a product that is increasing in popularity among Australian consumers. The company's income statements for the four most recent quarters follow: SMITH & CHIEF LTD. Income Statements For the Four Quarters Ending December 31 Quarter 1 Quarter 2 Quarter 3 Quarter Sales in units 5,600 Sales revenue 5,100 6,320 5,800 A$560,000 A$510,000 A$632,000 A$580,000 Less: Cost of goods sold 336,000 306,000 379,200 Gross margin 348, 000 224,000 204,000 252,800 232,000 Less: Operating expenses: Advertising expense Shipping expense Salaries and commissions Insurance expense Depreciation expense Total operating expenses Net income 22,100 22, 100 22,100 22,100 38,400 40,400 45,280 Use high low method and separate all the expenses into variable and fixed