Alden Company has decided to use the contribution approach to the income statement internally for planning purposes. The company has analysed its expenses and developed the following cost formulas: Cost Cost Formula Cost of goods sold ... $20 per unit sold Advertising expense ...... $170,000 per quarter Sales commissions 5% of sales Administrative salaries ....... $80,000 per quarter Shipping expenses ....... Depreciation expense ..... $50,000 per quarter Management has concluded that shipping expense is a mixed cost, containing both variable and fixed cost elements. Units sold and the related shipping expenses over the last eight quarters are given below: Units sold (,000) Shipping Expense Quarter Year 1: First Second ........... Third ........... Fourth Year 2: $160,000 175,000 210,000 180,000 First Second ..... Third .......... Fourth .. 170,000 190,000 230,000 205,000 Management would like a cost formula derived for shipping expense so that a budgeted income statement using the contribution approach can be prepared for the next quarter. Required: Using the least-squares regression method, estimate a cost formula for shipping expense. (Since the Units Sold above are in thousands of units, the variable cost you compute will also be in thousands of units. It can be left in this form, or you can convert your variable costs to a per unit basis by dividing it by 1,000). In the first quarter of year 3, the company plans to sell 21,000 units at a selling price of $50 per unit. Prepare an income statement for the quarter using the contribution format. b