Analyze a mixed cost using the high-low method.

Prepare income statement for a merchandising company using the contribution format.

1 To aid in planning, Jay Corporation is preparing a contribution format income statement. 3 Budgeted information for Quarter 1 of Year 3: 4 Sales in units s Sales price per unit 6 7 After analyzing expenses, the company has determined the following cost patterns 8 Cost of goods sold 9 Sales commissions 10 11 Administrative salaries 12 Rent expense 13 Depreciation expense 14 17,000 48.00 29.00 per unit 9.50% per dollar of sales 45,000.00 per quarter 27,000.00 per quarter 36,000.00 per quarter 15 Management has concluded that shipping expense is a mixed cost. Units shipped and the related shipping cost over the last eight quarters are 16 17 Year1 18 Quarter 1 19 Quarter2 20 Quarter 3 21 Quarter 4 Units Total Shipping Cost 67,000.00 94,000.00 89,800.00 92,600.00 12,500 21,000 13,800 20,000