Exercise 5 The accounting department of Archer Company, a merchandising company, has prepared the following analysis: Cost Formula Cost of goods sold P56 per unit Sales commissions 12% of sales Advertising expense P300,000 per month Administrative salaries P160,000 per month Billing expense ? Depreciation expense P62,000 per month The accounting department feels that billing expense is a mixed cost containing both fixed an variable cost elements. The billing expenses and sales in units over the last several months follow: January February March April May June Units Sold Billing (000) Expense 9 P30,000 11 33,000 14 36,000 17 42,000 15 39.000 12 35,000 The accounting department now plans to develop a cost formula for billing expense so that a contribution format income statement can be prepared for management's use. Required: a. Using the least-squares method, estimate the cost formula for billing expense. 6. Assume that the company plans to sell 30,000 units during July at a selling price of $100 per unit. Prepare a budgeted income statement for the month, using the contribution format