Milden 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 Cast Cost of good sold Advertising expense Sales commissions Shipping expense Administrative salaries Insurance expense Depreciation expense Cost Formula $27 per unit sold $184 000 per quarter 7% of sales ? $94.000 per quarter $10.400 per quarter $64.000 per quarter Management has concluded that shipping expense is a mixed cost containing both variable and foed cost elements Units sold and the related shipping expense over the last eight quarters follow Shipping Expense Units Sold Quarter Year 1 First Second Third Fourth Year 2 First Second Third Fourth 30.000 32,000 37 000 33,000 $174000 5189 000 5231,000 $194 000 31.000 34.000 44 400 41.400 $184,000 $199,000 $246,000 $222,000 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 Shipping Expense Units Sold High activity level Low activity level Change 0 $ 0 per unit Variable cost per unit Fixed cont element Type here to search 2. In the first quarter of Year 3, the company plans to sell 37 000 units at a selling price of $55 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 0 0 Ficed expenses Total foed expenses 0 0