Milden 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 of good sold Advertising expense Sales commissions Shipping expense Administrative salaries Insurance expense Depreciation expense Cost Formula $30 per unit sold $180,000 per quarter 7% of sales ? $90,000 per quarter $10,000 per quarter $60,000 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: Shipping Expense Quarter Year 1: First Second Units Sold 26,000 $ 170,000 28,000 $ 185,000 Third 33,000 $ 227,000 Fourth 29,000 $ 190,000 Year 2: First 27,000 $ 180,000 30,000 $ 195,000 40,400 $ 242,000 37,400 $ 218,000 Second Third Fourth 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 35,000 units at a selling price of $60 per unit. Prepare a contribution format income statement for the quarter.