Jay Corporation has provided data from a two-year period to aid in planning. The Controller has asked you to prepare a contribution format income statement.

Budgeted information for Quarter 1 of 2024:
Sales in units	17,000
Sales price per unit	$ 48.00

After analyzing expenses, the company has determined the following cost patterns.

Cost of Goods Sold (per unit)	$ 29.00
Sales Commissions (per dollar of sales)	9.50%
Administrative Salaries (per quarter)	$ 45,000
Rent Expense (per quarter)	$ 27,000
Depreciation Expense (per quarter)	$ 36,000

Shipping has been determined to be a mixed cost with the following total costs and units:

2022	Total Cost	Units
Quarter 1	$ 67,000	12,500
Quarter 2	$ 94,000	21,000
Quarter 3	$ 89,800	13,800
Quarter 4	$ 92,600	20,000
2023
Quarter 1	$ 72,500	13,700
Quarter 2	$ 80,000	14,000
Quarter 3	$ 84,000	14,300
Quarter 4	$ 100,000	22,500

Required:

Use the data to answer the following.

1. Using the high-low method, determine a cost formula for shipping costs.
2. Prepare a contribution margin income statement for Quarter 1 of 2024

1. Using the high-low method, determine a cost formula for shipping costs. \begin{tabular}{l} High level of activity \\ Low level of activity \\ Change in activity \\ \hline Variable cost per unit \\ \hline Fixed cost portion: \\ Total cost at high level of activity \\ Less: Variable cost element \end{tabular} 2. Prepare a contribution margin income statement for Quarter 1 of 2024. \begin{tabular}{|l|l|} & BudgetedIncomeStatementFor2024,Quarter1 \\ \hline Sales \\ \hline Variable expenses: \\ Cost of goods sold \\ Sales commissions \\ \hline Shipping expense \\ \hline Total variable expenses \\ \hline Contribution margin \\ \hline Fixed expenses: \\ \hline Adminstrative salaries \\ \hline Rent expense \\ \hline Shipping expense \\ \hline Depreciation expense \\ \hline Total fixed expenses \\ \hline Net operating income \\ \hline \end{tabular}