Check my work Milden Company is a distributor who wants to start using a contribution format income statement for planning purposes. The company has analyzed its expenses and developed the following cost formulas: Cost Formula $31 per unit sold $187,000 per quarter 7% of sales Cost Cost of good sold Advertising expense Sales commissions Shipping expense Administrative salaries Insurance expense Depreciation expense $97,000 per quarter $10,700 per quarter $67,000 per quarter Because shipping expense is a mixed cost, the company needs to estimate the variable shipping expense per unit sold and the fixed shipping expense per quarter using the following data: Shipping Expense Units Sold Quarter Year 1: First Second Third Fourth Year 2: First Second Third Fourth 33,000 35,000 40,000 36,000 $ 177,000 $ 192,000 $ 234,000 $ 197,000 34,000 37,000 48,750 45,750 $ 187,000 $ 202,000 $ 240,000 $ 216,000 Required: 1. Using the high-low method, estimate a cost formula for shipping expense in the form Y = a + bx. 2. In the first quarter of Year 3, the company plans to sell 43,000 units at a selling price of $60 per unit. Prepare a contribution format income statement for the quarter. Milden Company Budgeted Contribution Format Income Statement For the First Quarter, Year 3 Variable expenses: Total variable expenses Fixed expenses: Total fixed expenses