5 Morrisey & Brown, Lid., 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 Skipped Sales in units 6, 200 5, 700 7, 040 6,300 Sales revenue A$620,000 A$570, 000 A$704, 000 A$630, 000 Less: Cost of goods sold 372, 000 342, 000 422, 400 378, 000 Gross margin 248,000 228,000 281, 600 252,000 Less: Operating expensest Advertising expense 22 , 700 22, 700 22, 700 22, 700 Shipping expense 40, 800 42, 800 48, 160 42, 460 Salaries and commissions 88/ 200 81, 400 97, 480 94 , 860 Insurance expense 7 , 700 7 , 700 7,700 7, 700 Depreciation expense 16,700 16, 700 16, 700 16, 700 Total operating expenses 176, 100 171, 300 192, 740 184, 420 Net income AS 71,900 A$ 56, 700 AS 88, 860 A$ 67,580 ( Note: Morrisey & Brown, Lid.'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 sold) as being variable, fixed, or mixed. Expenses Classification Cost of goods sold Advertising expense Shipping expense Salaries and commissions Insurance expense Depreciation expense 2-a. Using the high-low method, separate each mixed expense into variable and fixed elements. Variable Cost Fixed Cost AS per unit LAS AS per unit AS Mc Pray 5 01 5 Cost Assingmen....jpeg Cost Assignmen....jpeg Cost Assignmen....jpeg Cost Ass esc 6:Required: 5 1. Identify each of the company's expenses (including cost of goods sold) as being variable, fixed, or mixed. Expenses Classification Cost of goods sold Advertising expense Skipped Shipping expense Salaries and commissions Insurance expense Depreciation expense 2-a. Using the high-low method, separate each mixed expense into variable and fixed elements. Variable Cost Fixed Cost AS per unit AS AS per unit AS per unit AS 2-b. Using the high-low method, state the cost formula for each mixed expense. Y- AS AS Y-AS AS X X X Y- AS AS