Class Exercise Start Stop Corporation distributes start and stop buttons. Start Stop owns some shipping equipment whose costs are sometimes lumped in with Shipping Expense. Below is a comparative income statement listing the last three months activity. Start Stop Corporation Comparative Income Statement Three Months Ending December 31, 2018 October 8,000 $800,000 $520,000 $280,000 November 10,000 $1,000,000 $650,000 $350,000 December 12,000 $1,200,000 $780,000 $420,000 Sales in Units Sales Revenue Cost of Goods Sold Gross Margin Selling & Administrative Expenses: Shipping Expense Advertising Expense Salaries & Commission Expense Insurance Expense Depreciation Expense Total Selling & Administrative Expense Net Operating Income $35,000 $70,000 $122,000 $24,000 $4,000 $255,000 $25,000 $43,000 $70,000 $130,000 $24,000 $4,000 $271,000 $79,000 $52,000 $70,000 $ 165,000 $24,000 $4,000 $315,000 $105,000 Required: 1. Using the high-low method, separate the mixed expenses (Shipping Expense and Salaries and Commission Expense) into variable and fixed components 2. Redo the company's income statement at the 12,000 unit level of activity using the contribution approach format Start Stop Corporation High-Low Method Shipping Expense Salaries & Comm Expense Units High Low Change Shipping Expense====> Sal & Comm Exp======> Variable Cost per Unit Variable Cost per Unit Fixed Costs Fixed Costs Shipping Expense Salaries & Commissions Expense Mixed Cost Function(Shipping Expense)======= Mixed Cost Function(Sal & Comm Expense) ======= Start Stop Corporation Income Statement -Contribution Margin Format Three Months Ended December 31, 2014 Sales Revenue Variable Expenses: Cost of Goods Sold Shipping Expense Salaries & Comm Expense Total Variable Expenses Contribution Margin Fixed Expenses: Shipping Expense Salaries & Comm Expense Advertising Expense Insurance Expense Depreciation Expense Total Fixed Expenses Net Income