1. Acme is an exclusive distributor of a product that is gaining rapid market acceptance. The company's revenues and expenses for the last three months are given below: Acme Ltd. Comparative Income Statements April 3,000 May 3,750 June 4,500 Sales in Units $420,000 168,000 252,000 $525,000 210,000 315,000 $630,000 252,000 378,000 Sales revenue Cost of goods sold Gross margin Selling and adm. Expenses: Shipping expense Advertising expense Salaries and commissions Insurance expense Depreciation expense Total selling and adm. expenses Net operating income (loss) 44,000 70,000 107,000 9,000 42,000 272,000 $(20,000) 50,000 70,000 125,000 9,000 42,000 296,000 $19,000 56,000 70,000 143,000 9,000 42,000 320,000 $58,000 Required: 1. 2. Identify each of the company's expenses (including cost of goods sold) as either variable, fixed, or mixed. Using the high-low method, separate each mixed expense into variable and fixed elements. State the cost formula for each mixed expense. Redo the company's income statement at the 4,500-unit level of activity using the contribution format. 3