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 Formula

Cost of good sold $$34$ per unit sold

Advertising expense $$190,000$ per quarter

Sales commissions $7\%$ of sales

Shipping expense $?$

Administrative salaries $$100,000$ per quarter

Insurance expense $$11,000$ per quarter

Depreciation expense $$70,000$ 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 $36,000$ $ $180,000$

Second $38,000$ $ $195,000$

Third $43,000$ $ $237,000$

Fourth $39,000$ $ $200,000$

Year $2$:

First $37,000$ $ $190,000$

Second $40,000$ $ $205,000$

Third $54,000$ $ $252,000$

Fourth $51,000$ $ $228,000$

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 $43,000$ units at a selling price of $$67$ per unit. Prepare a contribution format income statement for the quarter.