Miden Company has an exclusive franchise to purchase a product from the manufacturer and distribute it on the retail level. As an aid in planning, the company has decided to start using a contribution format income statement. To have data to prepare such a statement, the company has analyzed its expenses and has developed the following cost formulas: Cost Cost of good sold Advertising expense Sales commissions Shipping expense Administrative salaries Insurance expense Cost Formula $32 per unit sold $188,000 per quarter 8% of sales $98,000 per quarter $10,800 per quarter $68,000 per quarter Management has concluded that shipping expense is a mixed cost, containing both variable and fixed cost elements. Units sold and the related shipping expense over the last eight quarters follow: Units Sold Expense Year First Second 34,000 $178,000 38,000 $193,000 1,000 $235,000 37,000 $198,000 First Second Third Fourth 35,000 $188,000 38,000 $203,000 52,000 $250,000 49,000 $226,000 Milden Company's president would like a cost formula derived for shipping expense so that a budgeted contribution format income statement can be prepared for the next quarter Required: 1. Using the high-low method, estimate a cost formula for shipping expense based on the data for the last eight quarters above. Units Sold High activity level Low activity level Change Variable cost per unit Fixed cost element per unit In the first quarter of Year 3, the company plans to sell 39,000 units at a selling price of $65 per unit. Prepare a contribution format income statement for the quarter. (Do not round your intermediate calculations) Milden Company Budgeted Contribution Format Income Statement For the First Quarter, Year 3 Variable expenses Total variable expenses Fbxed expenses: Total fixed expenses