Milden Company has an exclusive franchise to purchase a product from the manufacturer and distribute it on the retai evel. 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 Formula Cost of good sold $27 per unit sold Advertising expense $177,000 per quarter Sales commissions 6% of sales Shipping expense Administrative salaries $87,000 per quarter $9,700 per quarter nsurance expense Depreciation expense $57,000 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: Shipping Quarter Units Sold Expense Year 1 First 23,000 167,000 Second 25.000 $182,000 Third 30,000 $224,000 Fourth 26.000 187,000 Year 2 First 24,000 177,000 Second 27,000 $192,000 Third 42,250 $244,000 Fourth 39,250 $220,000 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 the high-low method, estimate a cost formula for shipping expense based on the data for the last eight quarters above Shipping Units Sold Expense High activity level Low activity level Change per unit Variable cost per unit Fixed cost element