aces Saved 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 Sales in units Sales revenue HORRISEY & BROWN, LTD. Income Statements For the Four Quarters Ending December 31 Less: Cost of goods sold Gross margin Less: Operating expenses: Advertising expense Shipping expense Salaries and commissions Insurance expense Depreciation expense Total operating expenses Net income Quarter 1 Quarter 2 4,700 4,200 A$470,000 A$420,000 Quarter 3 Quarter 4 5,240 4,800 A$524,000 A$480,000 252,000 252,000 188,000 160,000 314,400 288,000 209,600 192,000 21,200 21,200 21,200 21,200 34,800 36,800 40,960 36,760 79,200 78,400 90,880 86,160 6,200 6,200 6,200 15,300 157,000 15,200 165,520 15,208 156,600 A$ $1,400 A$ 10, 200 4,200 15,200 174,440 AS 35,160 A$ 26,480 (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) 2-a. Using the high-low method, separate each mixed expense into variable and fixed elements. Variable Cost Fixed Cost AS per unit AS A$ per unit AS AS per unit AS 2-b. Using the high-low method, state the cost formula for each mixed expense. YAS +AS YAS AS YAS AS 4. Assume that the company's sales are projected to be 4,600 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 Less: Variable expenses: Less: Fixed expenses A$ AS AS 3. Redo the company's income statement at the 5,240-unit level of activity using the contribution format. MORRISEY & BROWN, LTD. Contribution Margin Income Statement For the Quarter Ended September 30 Sales in units Less: Variable expenses: Less: Fixed expenses: A$ 46 AS AS