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Could someone answer for me this question.Thank you in advance ove. Why might it be misleading to show the BORLEM 3-12 Cost Behavior, High-Low Method;
Could someone answer for me this question.Thank you in advance ove. Why might it be misleading to show the BORLEM 3-12 Cost Behavior, High-Low Method; Contribution Format Income Statement LOL, LOS, L04) Morrisey & Brown, Lid., of Sydney is a merchandising company that is the sole distributor of a podea hat is increasing in popularity among Australian consumers. The company's income statements for the three most recent months follow: www.mhhe.comoreenze September 5,000 A$500,000 300,000 200,000 Morrisey & Brown, Ltd. Income Statements For the Three Months Ended September 30 July August Sales in units ....... 4.000 4,500 Sales revenue ... A$400,000 A$450,000 Cost of goods sold .. 240,000 270,000 Gross margin ........ 160,000 180.000 Selling and administrative expenses: 21,000 21,000 Advertising expense ....... 34,000 36,000 Shipping expense ...... 78,000 84.000 Salaries and commissions 6,000 6,000 Insurance expense ...... 15,000 15,000 Depreciation expense .... 154,000 162,000 Total selling and administrative expenses A$ 6,000 A$ 18,000 Net operating income .. 21,000 38,000 90,000 6,000 15,000 170,000 A$ 30,000 (Note: Morrisey & Brown, Ltd.'s Australian-formatted income statement has been recast in the format common in the United States. The Australian dollar is denoted here by AS.) Required: 1. Identify each of the company's expenses (including cost of goods sold) as either variable, fixed, or mixed. 2. Using the high-low method, separate cach mixed expense into variable and fixed elements. State the cost formula for each mixed expense. 3. Redo the company's income statement at the 5,000-unit level of activity using the contribution format
Could someone answer for me this question.Thank you in advance
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