Frankel Company Traditional Income Statement For the 3 months ending September 30, 2020 Sales in units July 4,000 August 4,500 September 5,000 Sales $ 400,000 $450,000 $500,000 Cost of goods sold 240,000 270,000 300,000 Gross Margin 160,000 180,000 200,000 Selling & Administrative Expenses: 2 Advertising 21,000 21,000 21,000 3 Shipping 34,000 36,000 38,000 4 Salaries and commissions 78,000 84,000 90,000 -5 Insurance 6,000 6,000 6,000 16 Depreciation 15,000 15 000 15,000 17 Total Selling & Administrative Expenses 154,000 162.000 170,000 18 19 Net Operating Income S 6.000 $ 18.000 s 30.000 20 21 22 Required: 23 1. Use the high low method to determine the cost equation for each item on the income statement. 24 2. Using the cost equations, create the contribution income statement for 5,000 units. 25 3. Using the cost equations, create the contribution income statement for 4,800 units. 26 27