Arnall Ltd., a British merchandising company, is the exclusive distributor of a product that is gaining rapid market acceptance. The company's revenues and expenses in British pounds) for the last three months are given below: Arnall Ltd. Comparative Income Statements For the Three Months Ended June 30 April 2,200 May Sales in units 5,400 June 7,400 Sales revenue Cost of goods sold 418,000 171,600 1,026,000 421,200 1,406,000 577,200 Gross margin 246,400 604,800 8 28,800 Selling and administrative expenses: Shipping expense Advertising expense Salaries and commissions Insurance expense Depreciation expense 49,100 48,000 111,000 7,200 35,400 97,100 48,000 239,000 7,200 35.400 127,100 48,000 319,000 7,200 35,400 Total selling and administrative expenses 250,700 426,700 536,700 Net operating income (loss) (4,300) 178,100 292,100 (Note: Arnall Ltd.'s income statement has been recast in the functional format common in the United States. The British currency is the pound, denoted by .) Required: 1. Identify each of the company's expenses (including cost of goods sold) as either variable, fixed, or mixed. Classification Expenses Cost of goods sold Shipping expense Advertising expense Salaries and commissions Insurance expense Depreciation expense Using the high-low method, separate each mixed expense into variable and fixed elements. State the cost formula for each mixed expense. (Enter mixed expenses in the order of company expenses provided under question.) Fixed Cost Formula Variable Cost per unit per unit Y= Y = . Redo the company's income statement at the 7,400-unit level of activity using the contribution format. Arnall Ltd. Income Statement For the Month Ended June 30 Variable expenses: Total variable expenses Fixed expenses: Total fixed expenses