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 $23 per unit sold $173,000 per quarter 6% of sales ? $83,000 per quarter $9,300 per quarter $53,000 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: Quarter Units Sold Shipping Expense Year 1: First 19,000 $ 163,000 Second 21,000 $ 178,000 Third 26,000 $ 220,000 Fourth 22,000 $ 183,000 Year 2: First 20,000 $ 173,000 Second 23,000 $ 188,000 Third 33,400 $ 235,000 Fourth 30,400 $ 211,000 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 27,000 units at a selling price of $53 per unit. Prepare a contribution format income statement for the quarter.