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 4 Sales in units 5,600 5,100 6,320 5,800 Sales revenue A$560,000 A$ $10,000 A$632,000 A$580,000 Less: Cost of goods sold 336,000 306,000 379,200 348,000 Gross margin 224,000 204,000 252,800 232,000 Less: Operating expenses: Advertising expense 22,100 22,100 22,100 22,100 Shipping expense 38,400 40,400 45,280 40,180 Salaries and commissions 84,600 80,200 94,840 91,380 Insurance expense 7,100 7,100 7,100 7,10