9. Explain how account analysis is used to estimate costs I 11. Why might the high-low method lead to inaccurate results? 14. Describe how regression analysis is used to estimate costs. 15. How does the contribution margin income statement differ from the traditional income statement? Problems 32. Contribution Margin Income Statement. Last month Palermo Company sold its product for $60 per unit. Fixed production costs were $40,000, and variable production costs amounted to $15 per unit. Fixed selling and administrative costs totaled $26,000, and variable selling and administrative costs amounted to $5 per unit. Palermo produced and sold 7,000 units last month. Required: a. Prepare a traditional income statement for Palermo Company. b. Prepare a contribution margin income statement for Palermo Company. c. Why do companies use the contribution margin income statement format? 49. Cost Behavior at Best Buy. The following condensed income statement is for Best Buy Co., Inc., a large retailer of consumer electronics.