XYZ Corporation published the following information in its financial statements for its 2020 annual report: ABC Corporation Income Statement For the Year ended Dec. 31, 2020 . Sales 74,000 Cost of goods sold 48,000 Gross profit 26,000 Cash operating expenses 8,000 Depreciation 3,000 Total operating expenses 11,000 Earnings before interest and taxes 15,000 Interest expense 720 Earnings before taxes 14,280 Income tax expense 4,427 Net income 9,853 XYZ Corporation Balance Sheet Dec. 31, 2020 Cash 8,000 Short-term Investments 4,000 Accounts receivable 11,000 Inventory 9,000 Fixed assets, net 22,000 Total assets 54,000 Accounts payable 7,000 Accrued liabilities 2,000 Bonds payable 12,000 Common stock 22,000 Retained earnings Total liabilities & equity Additional Information 11,000 54,000 1. Sales in 2021 are estimated to be $92,000. 2. Cost of goods sold are considered to be variable costs. 3. $5,000 of the cash operating expenses for 2020 are considered variable costs, and the remainder are fixed costs. 4. Depreciation is, of course, considered to be a fixed cost. 5. Cash, accounts receivable, inventories, accounts payable, and accrued payables are considered to be spontaneous items.