ilden 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	Cost Formula
Cost of good sold	$21 per unit sold
Advertising expense	$171,000 per quarter
Sales commissions	4% of sales
Shipping expense	?
Administrative salaries	$81,000 per quarter
Insurance expense	$9,100 per quarter
Depreciation expense	$51,000 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:

Quarter	Units Sold	Shipping Expense
Year 1:
First	17,000	$ 161,000
Second	19,000	$ 176,000
Third	24,000	$ 218,000
Fourth	20,000	$ 181,000
Year 2:
First	18,000	$ 171,000
Second	21,000	$ 186,000
Third	27,000	$ 231,000
Fourth	24,000	$ 207,000

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 23,000 units at a selling price of $51 per unit. Prepare a contribution format income statement for the quarter.