4 02 23.08 Morrisey & Brown, 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 three most recent months follow. MORRISEY & BROWN, LTD. Income Statements For the four Quarters Ending December 31 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Sales in units 5,630 5.100 6.32e 5,786 Sales revenue A$562,888 A$510,080 A$632,380 A$578,eee Less: Cost of goods sold 336,00 386,00 379.200 342, eee Gross margin 224.668 284,80 252,80 228, eee Less: Operating expenses: Advertising expense 22,100 22,100 22.10e 22,180 Shipping expense 38,480 40,480 45,280 40, 180 Salaries and comissions B4,600 se, 288 94,840 91,380 Insurance expense 7,180 7,182 7,160 7,180 Depreciation expenset 16,192 16,188 16,160 16,100 Total operating expenses 168,388 165.988 185,420 176,860 Net income AS 55,78e A$ 38.180 A$ 67,380 A$ 51,140 Book (Note: Morrisey & Brown. Ltd. s Australian-formatted Income statement has been recast into the format common in Canada. The Australian dollar is denoted by AS.) Required: 1. Identify each of the company's expenses (including cost of goods solo) as being variable, fixed, or mixed. Classification Expenses Cost of goods sold Advertising expense Shipping expense Salaries and commissions Insurance expense Depreciation expense 2-a. Using the high-ow method, separate each mixed expense Into variable and fixed elements. 4 Fixed Cost AS AS AS Variable Cost per unit per unit per unit AS 222 8 02:22:40 Book 2-b. Using the high-low method, state the cost formula for each mixed expense. YEAS Ya AS Y= A$ +++ AS AS AS XXX 3. Redo the company's Income statement at the 6,320-unit level of activity using the contribution format. 4 MORRISEY & BROWN, LTD Contribution Margin Income Statement For the Quarter Ended September 30 Sales in units 02 22:09 AS Less: Variable expenses: AS eBook Less: Fixed expenses AS 4 AS 8.02.2149 eBook 4. Assume that the company's sales are projected to be 5,050 units in the next quarter. Prepare a contribution margin Income statement. MORRISEY & BROWN, LTD. Contribution Margin Projected income Statement For the Quarter Ended March 31 Sales in units AS Less: Variable expenses A$ Less: Foed expenses A$