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August July 4,000 $ 400,000 240,000 160,000 4,500 $ 450,000 270,000 180,000 September 5,000 $ 500,000 300,000 200,000 Sales in units Sales Cost of goods

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August July 4,000 $ 400,000 240,000 160,000 4,500 $ 450,000 270,000 180,000 September 5,000 $ 500,000 300,000 200,000 Sales in units Sales Cost of goods sold Gross margin Selling and administrative expenses: Advertising expense Shipping expense Salaries and commissions Insurance expense Depreciation expense Total selling and administrative expenses Net operating income 21,000 34,000 78,000 6,000 15,000 154,000 $ 6,000 21,000 36,000 84,000 6,000 15,000 162,000 $ 18,000 21,000 38,000 90,000 6,000 15,000 170,000 $ 30,000 Required: 1. By analyzing the data from the company's income statements, classify each of its expenses (including cost of goods sold) as either variable, fixed, or mixed. 2. Using the high-low method, separate each mixed expense into variable and fixed elements. Express the variable and fixed portions of each mixed expense in the form Y = a +bX. 3. Redo the company's income statement at the 5,000-unit level of activity using the contribution format. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Using the high-low method, separate each mixed expense into variable and fixed elements. Express the variable and fixed portions of each mixed expense in the form Y = a + bx. Fixed Cost Formula Variable Cost o per unit $ $ 0 $ Salaries and commissions Shipping expense ox X per unit Y = + Required 1 Required 2 Required 3 Redo the company's income statement at the 5,000-unit level of activity using the contribution format. Morrisey & Brown, Ltd. Income Statement For the Month Ended September 30 Variable expenses: 0 0 Fixed expenses: 0 $ 0 Required 2 Required 3

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